STOCK MARKETS — Market dips, gold rises after presidential

It’s amazing what effect a few words from a political leader can have on stock markets. When U.S. President Bill Clinton previewed his plans on national television to reduce his country’s deficit, the markets next day both in New York and Toronto dived, the former by almost 83 points and the latter by 31.7 points.

Perhaps not surprisingly, investors, concerned about higher taxes and what reduced government spending might mean to the slowly recovering North American economy, turned their attention to gold. At the Commodity Exchange of New York, the price of the yellow metal gained $3.40 to US$333 per oz. On The Toronto Stock Exchange, the gold and silver index jumped almost 131 points.

Today, Feb. 17, the TSE 300 composite index closed up 7.2 points to 3417.7 on 35.7 million shares. The afternoon gold fix in London was US$330.60. Placer Dome, which announced gold production of 1.95 million oz. and net earnings of US$111 million for 1992, closed unchanged at $17.63 on active volume during the week ended Feb. 16. The senior producer has benefited recently from a staking rush in the Kilometre 88 area of Venezuela. Successful exploration results from two gold properties in Chile and one in Canada made Lac Minerals one of the leading traders for the week; the issue closed up 63 cents to $7.50. At Lac’s Red Mountain property in British Columbia, 1992 drilling more than doubled the gold reserves to more one million ounces.

Thunderwood Resources closed up 9 cents to 49 cents on a volume of nearly 28 million shares after announcing that it has entered into a joint venture agreement with Aur Resources to explore the Jones Hill copper-zinc deposit in New Mexico.

Noranda, which slipped 38 cents to close at $18.50, announced net earnings of $79 million for 1992. Clouding the favorable financial news was the announcement that Noranda is reducing its production of zinc concentrate by up to 45,000 tonnes in 1993 because of a worldwide surplus of zinc concentrate.

Noranda-controlled Kerr Addison Mines moved up $1.25 to close at $18.25 on news that it had a net income of $30.7 million in 1992, compared with a net income of $3.2 million in 1991. An after-tax gain of $34 million from the sale of its holdings in Minnova was responsible for most of Kerr’s increase in earnings.

After purchasing Kerr’s 50.4% interest in Minnova in late 1992, Metall Mining has made a proposal to acquire all of the remaining Minnova shares on the basis of one Minnova share for one Metall share and $4. Minnova shares jumped $1.25 on the week to close at $15.50, while Metall shares closed at $12 down 25 cents.

The price of Minera Rayrock shares moved up 2 cents on thin volume to close at $1.82. Minera released news that shallow exploration drilling at its Sierra Valenzuela property in Chile has returned widespread copper mineralization with good grades.

Aurizon Mines announced that operations at its Sleeping Giant gold mine in northern Quebec are scheduled to resume in May. Aurizon shares moved up 2 cents to 31 cents.

Also reporting a profit in 1992 was Sherritt Gordon. The company posted net earnings of more than $2.27 million, an increase over 1991 of more than $1.1 million. Sherritt closed up 25 cents at $6.50 on slightly more than 31 million shares.

Freewest Resources jumped 80 cents to close at $2.55 on news that drilling had intersected several well mineralized zones on its Verneuil Twp. gold property in northwestern Quebec.

Although a major staking rush for diamonds has been reported in Le Tac Twp. area in northwestern Quebec, trading of the Montreal Exchange-listed juniors involved in the play has been extremely slow.

Exploration Miniere du Nord, which announced that it was negotiating a deal with Monopros, the Canadian subsidiary of De Beers Consolidated Mines, over its Le Tac Twp. kimberlite property in northern Quebec, moved up 3 cents to close at 39 cents. Orbit Exploration, which lost 15 cents to close at 24 cents, and its VSE-listed partner Goldstack Resources also reported the presence of kimberlites on their Le Tac property.