STOCK MARKETS — Market up despite persistent currency

Despite the fact that currency markets remained skittish, major North American stock markets continued to build momentum during the report period ended March 14, with both the Dow Jones industrial average and the Standard & Poor’s 500 stock index hitting record highs.

The TSE 300 composite index, not to be left out, followed the lead by posting its ninth consecutive winning session. The index gained about 68 points, closing at 4190.54.

The week started off in turmoil as concerns about Canadian and U.S. currencies continued to vex investors. Stability returned to the American dollar later in the week when the Federal Reserve Board suggested U.S. interest rates may indeed rise in the near future. The U.S. Commerce Department added fuel to the fire by reporting lower-than-expected retail sales numbers and a 4-year low in the unemployment rate, thereby boosting the Dow Jones and the Standard & Poor 500 index.

Canadian markets shook off concerns about the lacklustre loonie and went along for the ride. A substantial drop in the trend-setting Bank of Canada rate added some momentum and had a buoyant effect on the composite index. The rate was set at 8.4%, down 20 basis points from the previous week’s 12-month high of 8.6%.

Despite the drop in the Bank of Canada rate, the Canadian dollar remained firm and ended the week at US70.75 cents, up slightly.

The two key subgroups were mixed on the week, with metals/minerals posting a 1.8% gain and gold/precious metals losing 0.5%.

The price of the yellow metal continued to rise, spurred on by the currency woes. The London afternoon fix on March 15 was US$386.15 per oz., up US$6.15 from the previous week.

Senior gold producers were mixed, however, following the listless performance of the gold/precious metals subgroup. Barrick Gold, for example, shed 25 cents to end at $32.63 and Echo Bay Mines dropped 13 cents to go to $13.78. Hemlo Gold Mines added 50 cents to end at $13.38.

Placer Dome announced it is considering acquiring advanced-stage exploration projects as part of a plan to boost annual gold production to over 2.5 million oz. A mergers and acquisitions team is already eying opportunities. Shares of Placer gained 25 cents to end at $31.

Vancouver-based Cominco seems to have adopted a similar philosophy, as indicated by its $102-million share exchange offer for a 44% interest in Cominco Resources International. With the acquisition, Cominco Resources will become a wholly owned subsidiary of Cominco Inc. Suggestions have been made that this move could represent the first step in a broader restructuring that would affect Cominco Inc., its subsidiaries and its parent corporation, Teck. Shares of Cominco Inc. were up 25 cents to $21.87, Cominco Resources shares added 30 cents to $3.35 while the class B shares of Teck lost 25 cents to close $23.39.

An incorrect gold value crept into this market column last week in reference to the purchase by TVX Gold of the assets of Greek-owned Kassandra Mines. Grades for the 15.4 million tons of reserves from the three mines should have read 3% lead and 4% zinc, plus 0.184 oz. gold and 2.92 oz. silver per ton. African explorer International Gold Resources was granted an option to earn a 90% interest in the Poura mine, Burkina Faso’s largest gold producer. Should the company decide to proceed (after completing due diligence), it would suspend production and spend several million dollars exploring along strike from, and at depth within, the mine. Shares of International Gold added 30 cents to close at $4.30.

Toronto-based Tiomin Resources signed a deal with Saudi-based Shairco to develop the Natashquan heavy mineral sands project on Quebec’s North Shore. The sands will be extracted and shipped to Saudi Arabia for processing. The joint venture expects to sell, on an annual basis, about 550,000 tons of hot briquette iron, 110,000 tons of synthetic rutile, 247,500 tons of hematite concentrate, 8,800 tons of zircon and up to 58,300 tons of garnet.