STOCK MARKETS — Golds stay afloat as bullion prices rise

Gold bullion prices rose US$3.35 to close at US$383.60 per oz. at the end of our report week. The Toronto Stock Exchange gold and silver index fell slightly to 10,372.40 from 10,497.00.

Most of the major gold equities were either up slightly or even. For example: American Barrick gained 25 cents to $34.38; Placer Dome was up marginally at $32.50; Lac held firm at $11.63; and Echo Bay was up 25 cents to $17.

The big exception was Franco-Nevada Mining, which took a hit, losing $5.50 to close at $81.25.

Among base metal stocks, Inco turned down nearly $4 to close at $33.38. Arimetco International has finished first-phase reserve analysis on its Mesaba copper-nickel property in Minnesota. The life-of-mine reserve is 3.3 billion tons (no, that’s not a typographical error) grading 0.649% copper equivalent, using a 0.38% cutoff and a strip ratio of 1.15-to-1. (The average copper grade at Codelco’s Chilean operation is about 1%; at Highland Valley Copper’s British Columbia mine, it is 0.414%.)

At Mesaba, the copper equivalent includes nickel (at US$2.55 per lb.) and copper (at 85 cents per lb.), but not cobalt nor precious metals credits. Lakefield Research has found that a commercially acceptable copper-nickel bulk concentrate could be produced from conventional flotation. An orebody of this magnitude, should it come into production, could support a 100,000-ton-per-day operation for 80 years, Arimetco estimates. Company Chairman Roy Shipes told The Northern Miner that some majors have been talking with him about developing the resource. He says he’s willing to part with 60%, leaving Arimetco with the remainder. A 3.5% net smelter royalty has already been pledged to the previous owners.

Arimetco has hovered near $2 for several weeks. It closed off 23 cents at $1.92.

Altai, in spite of news that it acquired a couple of properties in Peru, fell 26 cents to $2.84.

Under new management, City Resources plans to renew efforts to bring its Cinola property, on Queen Charlotte Island, into production. This time, though, the new control group wants to try to work with natives and environmentalists. City closed at 72 cents, a gain of 22 cents. Aaron Oil bounced significantly higher, gaining 46 cents to close at $2.45. Rhonda Mining this past week announced it is taking control of Aaron (see report on Page 6). Rhonda closed sharply higher at $8.63, a gain of $2.50. Caledonia Mining shed 70 cents to close at $2.55. The drop comes as a bit of a surprise since Caledonia’s subsidiary, Reunion Mining, just announced favorable exploration results from its diamond projects in Zimbabwe. A big percentage gainer was Hardrock Extension, nearly doubling in price by gaining 22 cents to close at 47 cents on a volume of 341,200 shares. Hardrock President Michael Malouf attributes the price increase to renewed interest in the Geraldton gold camp, due largely to the exploration efforts of Asarco. Great Lakes Minerals reported “excellent results” from its drill program at the Lluvia del Oro gold project in Mexico. Mineralization was intersected from surface to depths of 360 ft. Grades ran as high as 2.5 grams per ton across 55 ft. to a low of 0.6 grams across 40 ft. Great Lakes has embarked on a second, $500,000 program.

In other news, the company completed a $35-million share issue to secure a 20% undivided interest in the Grouse Creek mine and fund its share of pro rata development costs. The Idaho mine is being developed by Hecla. Great Lakes closed even, at $2.04.