STOCK MARKETS — Mining issues add sparkle to eastern stock

Gold and base metal stocks emerged as star performers on eastern markets during the week ended Mar. 23 as metal prices began to show some signs of life.

They helped the Toronto Stock Exchange overcome bearish sentiments in New York, where fears of inflation and a presidential impeachment in Russia put a damper on trading. The TSE 300 composite index added 58 points to 3599 and continued to gain ground today (March 24) as more than 61.5 million shares changed hands.

Responding to the Russian dilemma and demand from the Far East, gold added US$4 to US$332.25 per oz. in Toronto. Nickel and copper also moved higher, with platinum registering a US$8.45 gain to US$356.90 per oz. As a result, the TSE’s gold and silver index added 375 points to 6157 and the metals and minerals index picked up 79 points.

Inco and Noranda stood out among the base metal producers, adding $1.63 to $30.50 and 50 cents to $20.13 respectively. Noranda says it plans to sell its 54% interest in ME-listed Louvem Mines to the highest bidder. American Barrick Resources, bouncing back from U.S. royalty threats the previous week, was up $1.38 to $21 while Placer Dome added 88 cents to $19. Also climbing into new 52-week territory during our report period were Aurizon Mines, Cambior, Golden Star Resources, Lac Minerals, Minera Rayrock and Royal Oak Mines.

Lac was the most active stock, adding 50 cents to $9.50 on a volume of 7.2 million shares. The latest results from the company’s Nevada gold project in Chile indicate that the property could develop into a large-tonnage open pit. Lac closed at $9.25 today.

But while some analysts believe the gold price may indeed be breaking out of its 12-year bear market, others are advising investors to proceed with extreme caution.

“The senior gold companies continue to ignore the fact that, for many companies, revenues are declining sharply and earnings are virtually non-existent,” says John Lydall of First Marathon, who points out that the gold and silver index is almost 40% above its low in May, 1992, when gold was US$10 higher.

Gold closed at US$331 in London today.

On the discovery of two new kimberlite pipes in the Lac de Gras area, a select group of diamond stocks also climbed smartly. With claim to one of the discoveries, Lytton Minerals resumed its rise to the stars, adding 64 cents to $3.40 on a volume of 2.6 million. Today, the issue added another 20 cents to $3.60, giving it a market value of more than $300 million. Kennecott Canada made the second discovery on ground held by DHK Resources, about 25 km south of the Point Lake discovery. SouthernEra Resources, which holds a 10% interest in DHK ground, was unchanged at $5.13. Aber Resources, also with a 10% interest, added a cent to $2.49.

Losing 7 cents to 78 cents, Redaurum Red Lake Mines says it has exercised its option to purchase Cornerstone Investments, a private Australian company with a 50% interest in a diamond operation in Zimbabwe, despite being shy of the $5 million required for the deal.

Also looking for diamonds in southern Africa, Wye Resources (CDN) more than tripled in price to $1.70. The company has recovered 10 diamonds weighing a total of 52 carats from its alluvial prospect in Zaire.

A 20 cents advance in share price of Craibbe-Fletcher Gold Mines (CDN) prompted the company to announce that it knows of no reason for the market activity. Craibbe’s gold property, where Placer is completing ground magnetometer surveys, adjoins Placer’s Campbell mine in northern Ontario. Down a penny to 44 cents, Corner Bay Minerals has intersected more high-grade copper at its property near Chibougamau, Que. Soquem, which is earning a 50% interest in the deposit by spending $1.2 million, plans to resume drilling shortly.

Up 2 cents to 52 cents, St Andrew Goldfields reported record revenue and gold production in 1992. Revenue from bullion sales topped $15 million in 1992 while gold output from its Stock Twp. mine in northern Ontario rose to 36,301 oz.

Announcing plans to drill another 2,000 metres at its Lewis Ponds polymetallic project in Australia was Tri Origin Exploration. At 70 cents bid, 85 cents ask, Tri Origin says the program is designed to expand a mineral inventory of 1.5 million tonnes.