STOCK MARKETS — Jump in bank rate deals a blow to TSE

A surging bank rate helped take the wind out of the TSE’s sails over the 5-day report period ended Dec. 13. The composite 300 index dropped 35.03 points to close at 4,044.41 as higher interest rates moved investors to the sidelines in favor of interest-bearing securities.

As expected, the banks jacked up the prime lending rate by half a percentage point to 8% — its highest level since last summer. The jump came after the Bank of Canada raised the bank rate by 71 basis points to 7.03%. The higher bank rate should help shore up the Canadian dollar, which closed the week down nearly three quarters of a cent to US72.08 cents. Last year the dollar averaged US77 cents, compared with US83 cents in 1992. Despite a listless performance in recent months, TSE trading for 1994 topped 14.9 billion shares this week, eclipsing the old yearly record of 14.8 billion set last year. In October, the yearly value record surpassed the previous mark of $147 billion. That record has been pushed higher in recent weeks, and the current trading value exceeds $176 billion.

This marks the second year in a row that the TSE has set new volume and value records.

The gold and precious metals sub-group gained 513.44 points over the week to close at 9111.70. The rise was precipitated by a slight jump in the gold price, with the London afternoon fix on Dec. 14 set at US$80.50 per oz., up US$3.50 from a week ago.

Rising bullion prices helped the senior gold producers move higher, with American Barrick Resources up $2 to $30.38 and Placer Dome — the big winner — posting a $2.13 increase to $28 on a volume of more than 5.6 million shares.

The discovery by Hemlo Gold Mines of a new gold-bearing alteration zone on Glen Auden Resources’ Sewell-Reeves property near Timmins, Ont., has triggered a major staking rush. One of the better drill intersections graded 6.5 grams gold per tonne over 11.9 metres.

Junior companies and individuals are rumored to be feverishly staking in Reeves, Sewell, Kenogaming and Penhorwood twps. Active players include Band-Ore Resources, and Vancouver-listed Haddington Resources and East-West Resources.

Hemlo moved up 63 cents to $12.75, while Glen Auden had a high of 30 cents and a low of 20 cents with more than 4.8 million shares trading hands. Band-Ore posted a high of 43 cents and a low of 30 cents.

At a general meeting this week in Toronto, shareholders of Echo Bay Mines approved a new shareholder rights protection plan (better known as a “poison pill”). The plan is designed to block a hostile takeover and give management sufficient time to find other bidders or restructure the company. Echo Bay shares moved up $1.13 to $15.

Mining contractor Ross Finlay, a subsidiary of Val d’Or, Que.-based Espalau Mining, has won a $10-million contract for the development of River Gold Mines’ deposit near Wawa, Ont. River Gold gained 23 cents to $2.38 and Espalau added 9 cents to close at 80 cents.

The Royal Canadian Mounted Police (RCMP) has launched an investigation into an explosion that left one miner dead at Miramar Mining’s Con gold mine near Yellowknife, N.W.T. The RCMP says the incident occurred at about 3:10 pm on Dec. 12, when miners were preparing to exit an area on the mine’s 1,100-metre level following their shift. Miramar shares closed up 63 cents to end the week at $5.63.

Robert Friedland has temporarily become co-chairman of Diamond Fields Resources, following the company’s recent nickel and copper discovery in Labrador. Friedland, who expects to remain in the position for six months, says he will help select an adviser to aid in deciding how the company will proceed with the project. Diamond Fields jumped $1.50 to $9.75.