STOCK MARKETS — Markets make gains as dollar strengthens

The holiday weekend in several Canadian provinces left most investors indifferent as the Toronto Stock Exchange posted a moderate gain of 34.82 points. Over the 4-day report week ended Aug. 8, the TSE 300 composite advanced to 4,621.74 points.

In the midst of reports that business confidence and consumer optimism were lower in the month of June, the Bank of Canada lowered its trend-setting rate by 18 basis points to 6.84%. This drop marks a change in the upward trend in the rate, which began four weeks ago.

The rate, which is set 25 basis points above the average yield on 3-month treasury bills, was helped by a stronger performance in the Canadian dollar. Many market analysts think the Bank of Canada’s strategy is to take advantage of a stronger dollar, enabling it to lower borrowing costs and thereby encourage economic growth. During the week, the dollar rose by more than half a cent to close at US73.66 cents.

Both the gold-and-precious-metals sub-index and its metals-and-minerals counterpart posted modest gains. The latter rose by a healthy 2.6% and closed at 4,993.97, while the former, supported by stronger base metal prices, rose in response to lower inflation and inventory levels. The precious metals sub-index managed a shaky 0.2% gain, closing at 10,720.47 points.

Precious metals prices were all stronger, with the London morning gold fix for Aug. 9 gaining US$1.85 to close at US$384.50 per oz. The fix for platinum rose by US75 cents to close at US$422.75, while the silver fix jumped US14 cents and closed at US$5.29.

Most senior golds were moderately down on the week, with Barrick Gold losing 50 cents to close at $34.88 and Placer Dome losing 25 cents to end at $35.25. Hemlo Gold Mines remained unchanged. Bucking the downward trend was Echo Bay Mines, which posted a solid gain of $1.50 to close at $14.50.

Many base metals producers were spurred on by gains in nickel and copper prices and strong second-quarter earnings. The London Metals Exchange price for nickel broke the US$4-per-lb. mark, gaining US12 cents to close at US$4.03, while the copper price added US2 cents to close at US$1.37.

Senior nickel producer Inco shot up by $2.13, closing at $47.13, while Falconbridge closed at $27.25, up 13 cents. Copper producers that had a winning session included Noranda, up 63 cents to $29, and Cominco, up 25 cents to $27.13.

Several intermediate-sized gold producers also ended the week on a positive note. Agnico-Eagle Mines announced that exploration drilling completed at the LaRonde polymetallic project near Val d’Or, Que., has led to an increase in reserves within the five sulphide lenses outlined. Shares of Agnico were up 88 cents to end at $19.50.

Announcing that it had purchased control of a junior company active in the Timmins camp, Royal Oak Mines gained 15 cents to close at $4.60. Encouraging results were also reported from Royal Oak’s drilling program at Nighthawk Lake.

Junior gold producer Louvem Mines enjoys continual success with its development of the Beaufor gold property. The issue closed unchanged at 39 cents on very light trading.

Meanwhile, increased reserve figures for the Secret Pass gold deposit in southwest Nevada were unveiled by Inter-Rock Gold and Rayrock Yellowknife Resources. Inter-Rock tacked on 5 cents to close the week at $1.15. There was very light trading in Rayrock, which closed at $15, down 25 cents.

Joutel Resources completed a $2.7-million offering to finance further exploration at its southeastern Cuban gold property. Joutel ended at 30 cents, up 2 cents on the week.

Montreal-based Cambior stated it intends to acquire the remaining 25% of Audrey Resources. Cambior will offer, by Sept. 1, $1.40 for each Audrey share it does not own. Audrey’s main asset is the newly commissioned Bouchard-Hebert polymetallic mine near Rouyn-Noranda, Que. Investors immediately snapped up Audrey shares, enabling the issue to gain 20 cents, closing at $1.42. On the other hand, Cambior shares shed 25 cents to end at $17.50.