STOCK MARKETS — Metals market react to possible Russian strike

The Toronto Stock Exchange backed away from the record high of Feb. 25, falling 92.73 points during the report period ended March 4 to close at 6,155.05. Volumes were also smaller, averaging 104 million shares per day as investors rushed to meet the Feb. 28 deadline for contributions to registered retirement savings plans.

The Canadian dollar fell 12 basis points to US73.09 cents, as the U.S.

dollar broadened its lead on the European currencies. Benefitting from generalized Euroweakness, the loony and the Japanese yen were also strong against the other major foreign currencies. The yen, however, also fell against the greenback.

Excitement in the precious metals market peaked on Feb. 28 as the possibility of a strike at the Noril’sk nickel mine in northern Russia threatened to disrupt supply of byproduct platinum group metals. Platinum got as high as US$398.75 per oz. on Feb. 28, and palladium reached US$157 per oz. on the previous day. The markets took a couple of deep breaths, allowing the two metals to fall back. Platinum fixed at US$384 per lb., and palladium at US$148.25 per lb., on the morning of March 5.

Gold tagged along for the ride, rising to US$362.15 per oz. on March 3 before falling back to US$355.75 for a net gain of $1.90 over the report period.

Silver, at US$5.34 per oz., was up 11 cents.

The TSE gold and precious minerals sub-group, ever sensitive to the price of gold, fell 182.15 points to close at 11,215.30 on March 4. The loss in value of 1.6% was about even with the broad market. Placer Dome, weaker by $1.90 at $27.85, was the most heavily traded issue, with 9.1 million shares changing hands. The loss was partly a reaction to claims made by Crystallex International that it has a share in the Las Cristinas property in Venezuela.

Crystallex was up 65 cents to close at $3.95.

Bre-X Minerals was $1.15 lower at $18.65, with 8 million shares trading. The company announced it had signed a binding agreement covering the development of the Busang gold deposit in Indonesia. New joint-venture partner Freeport-McMoRan Copper & Gold was up 25 cents to US$32.25 on the New York board. Minorca Resources, minence grise to Bre-X’s Indonesian partner, Askatindo Karya Mineral, was off 55 cents at $5.65.

Base metals climbed aboard the Noril’sk Express, which also stopped at the London Metals Exchange station. Nickel added 10 cents per lb. to finish the report period at US$3.64 per lb. Copper was a penny higher at US$1.11 per lb., and zinc came to life, tacking on 3 cents to close at US56 cents per lb.

The TSE metals and minerals sub-group was 41.57 points higher, finishing at 5,647.38. Rio Algom was the star, picking up $2.10 to close at $35.50.

Cominco added $1 to finish at $39.50. Heavily traded institutional favorites generally went the opposite way — Inco fell 25 cents to $48.50, Noranda shed 40 cents to close at $32.80, and Falconbridge was off 25 cents at $31.65.

Among Toronto juniors, Altai Resources fell 40 cents to $1.24 as negotiations broke down between the company and Australian major Normandy Mining. Normandy was to have begun a drill program at Altai’s Mabulao property in the Philippines but declined to take an option on the property. Normandy has since offered a new, and less favorable, deal to Altai.

Antares Mining was up $1.10 to close at $3.45. The company closed a deal to acquire 45% of the Ojolali gold property on Sumatra, Indonesia. American Gem, which is still test-marketing its sapphires, moved 23 cents lower to 50 cents.

On the Montreal Exchange, Coleraine Mining Resources added 17 cents in active trading to close at 64 cents. The company is exploring the Perron gold prospect, east of Normetal, Que. The market was disappointed a week earlier, when assays grading only 3-37 grams gold were released. The issue recovered much of its loss over the report period.