STOCK MARKETS — Juniors dominate drifting market

The Toronto Stock Exchange settled lower last week, supporting the view that the markets are fully valued. The TSE 300 composite index was down 18.94 points (0.4%) over the period May 22-28, closing at 5,219.31. Volumes were low much of the week but returned to more usual levels on May 28. Both gold and base metal sectors were weaker over the period, although the gold issues propped up a sagging market at the end.

The Canadian dollar was weaker against the U.S. dollar and the pound but gained against the other major foreign currencies. The Loony was down 22 basis points to US72.65 cents on May 28.

The precious metals markets reversed last week’s setback, with gold picking up 65 cents to reach US$391.65 per oz. on the morning of May 29. Platinum had a better week too, adding $3 for a morning fix at US$400.25 per oz. Silver recovered 8 cents for a price of US$5.37 per oz.

TSE gold stocks were mostly lower. The gold and precious metals sub-index fell 25.59 points (0.2%) to 12,804.88. TVX Gold, down 10 cents to $12.15, was the most active stock on the sub-index, though only 2.5 million shares were traded. Barrick Gold lost 30 cents to close at $42.60, and Placer Dome lost 65 cents to close at $38.85. Cambior was 25 cents higher, closing at $20.85, and Kinross Gold was up 10 cents to $12.05.

Royalty sisters Euro-Nevada and Franco-Nevada went their separate ways, with Euro picking up $6.75 to close at $65.25 and Franco sliding $1.15 for a closing price of $87.50.

Times were better for the base metals, too. The London Metals Exchange morning rings on May 29 saw nickel up 8 cents on the week, to US$3.59 per lb., and copper up 4 cents to US$1.15. Lead, which has been easing off a price spike, was down 1 cents to US37 cents per lb., and zinc was off marginally as well.

The base metal stocks were mostly lower, with the TSE metals and minerals sub-index off 48.09 points or 0.9% at 5,390.58. Diamond Fields Resources, with a volume of 2.8 million shares, was the most active, adding 25 cents to close at $39.95. Inco was down 50 cents to close at $44.60.

Two other heavily traded base metal issues were lower. Noranda fell $1 to close at $29.40 and Cameco lost $1.75 for a close of $68.15. Moving against the tide was Inmet at $10.70, up 10 cents.

On the junior side, while the speculators continued to search for the new Bre-X, the old one was doing quite well, tacking on a respectable $2.70 to close at $26.10. Its Montreal-listed affiliate, Bresea Resources, was 45 cents higher at $16.85.

Arequipa Resources vaulted $12.50 when it announced drill results from its Pierina property in Peru, finishing May 28 at $32.65 and touching $34.75 earlier in the trading period. Its total trading volume was 6.4 million shares. Another strong gainer was Nuinsco Resources, which added $1.20 to close at $4.25. Its Rainy River nickel prospect is the source of the excitement, although no recent news has been released.

Greenstone Resources announced the acquisition of Hemco-Nicaragua, which owns three mining concessions in northeastern Nicaragua. The company, which will join the TSE 300 index at the next revision, was up $2.80 to $16.70.

The most active junior, to the tune of 10.3 million shares, was Black Swan Gold, which crept up 1 cents to finish the trading period at $1.53. Interest in the Cata Preta project in Brazil is sustaining the price of the stock.

Aurex Resources added 20 cents to reach 56 cents as the market continued to reward the company’s restructuring plans.

Queenston Mining was up sharply to $3.65, an advance of 65 cents. A total of 5.1 million shares crossed the floor. Joutel Resources, a Queenston affiliate, added 9 cents to close at 46 cents on a volume of 6.3 million shares. Joutel, active in several projects in Cuba, had not released any news, but investors may have been waiting to see whether it would be troubled by American laws affecting offshore companies with interests on the island.

The second shoe dropped last week, and nickel refiner Sherritt was the only Canadian company explicitly affected by the legislation.