STOCK MARKETS — NovaGold more than doubles despite gold

While Canadian investors were busy feasting on turkey and Blue Jays baseball, the gold price commenced a downhill slide in New York, giving up $5.20 to US$345.20 per oz. on Thanksgiving Day.

By the close of the report period ended Oct. 13, gold had dropped to US$343.75 and The Toronto Stock Exchange’s gold and silver index had lost 168 points to 5296.51.

Analysts are attributing the price decline to a stronger U.S. dollar, producer selling and, over the longer term, gold’s failure to break through the US$350 level after climbing steadily from US$335 in August. Gold’s sudden retreat had an impact on some of the major producers, with American Barrick Resources shedding 63 cents to $36.88 and Lac Minerals losing 13 cents to $8. Placer Dome, a stellar performer of late, lost 63 cents to

$14.13 despite announcing a substantial increase in reserves. But for two junior golds, weaker prices were of little consequence. Reporting initial copper production at its Murray Brook mine in New Brunswick, NovaGold Resources soared to 50 cents from 20 cents on a volume of almost one million shares.

NovaGold, down 3 cents today (Oct. 14), expects to produce 6.5 million lb. copper from the mine in the next four months.

Golden Star Resources, about to start production at its Omai gold mine in Guyana, picked up 88 cents to $5.63 as 556,000 shares changed hands. The nickel price continued to erode during the report period, losing another 17 cents to US$2.84 per lb. A steady decline in demand for nickel has prompted Russia’s largest producer to consider slashing its production, which is already down 15% from 1991 levels.

Investors can’t rid themselves of nickel shares fast enough. Trading 2.8 million, Inco finished the week down 17 cents at $27.13 after hitting yet another low for the year.

Sherritt Gordon also touched a 52-week low of $6.63 before recovering somewhat to $6.75. Sherritt recently agreed to sell its oil claims in Indonesia to Bow Valley Industries.

Concluding its purchase of a controlling interest in the Golden Reward mine in South Dakota, Wharf Resources lost 37 cents to $5.63. Vendor MinVen Gold, which will retain a 40% interest in the mine, picked up 4 cents to 32 cents. As part of a separate buyout agreement, shareholders of Kerr Addison Mines approved the sale of Kerr’s controlling interest in Minnova to Metall Mining for $136.6 million. Speculation is still rampant that Noranda will make a takeover offer for Kerr in order to secure control of the affiliate’s rich treasury.

Metall and Noranda gave up 26 cents and 25 cents respectively during the report period to close at $13.13 and $18.25. Kerr closed unchanged while Minnova picked up 50 cents to $17.

Declining stocks dominated the broad market, with the composite 300 index closing down 15 points. Today, the index lost another 19.5 points on a volume of 23.7 million as investors continued to fret about higher interest rates, the referendum and weak corporate earnings for the third quarter. Shedding 38 cents to $19.75, Alcan continues to spout red ink. The aluminum producer attributes its $10-million third-quarter loss to soft aluminum prices.

Trading in diamond stocks was relatively quiet. Reportedly drilling their fifth hole on the south shore of Lac de Gras, N.W.T., Aber Resources and SouthernEra Resources closed unchanged at $2.02 and $1.80, respectively. Down 1 cents to 28 cents, Lytton Minerals says a group of British investors has agreed to purchase units of Lytton for total proceeds of $1.02 million. Lytton will use the funds to finance diamond exploration on its vast landholding near Lac de Gras.

Notably active diamond stocks included Westfort Petroleums, down one penny to 8 cents on 661,000 and United Reef Petroleums, up a penny to 34 cents on 470,000.

Trading voluactive diamond stocks included Westfort Petroleums, down one penny to 8 cents on.