STOCK MARKETS — Precious metal producers respond to gold

A slight increase in the gold price during the week ended Jan. 26 drew a strong response from The Toronto Stock Exchange’s gold issues, which beat out diamond stocks as the most active traders for the first time in months.

As gold added US$2 to US$330.25 per oz. in New York, the TSE’s gold and silver index posted a 1-day advance of 75 points, before slipping back to end the week with a 39-point gain. Platinum jumped US$5 to US$363.50. Trading more than 3.5 million shares, Placer Dome gained $1.25 to close at a new 52-week high of $16.50. Other active gold stocks included Lac Minerals, up 13 cents to $5.63; Royal Oak Mines, up 3 cents to $1.98; and American Barrick Resources, up $1.63 to $36.88.

The TSE 300 composite index tacked on 22 points for the week, losing 1.2 of those points today, Jan. 27.

Analysts said dealers entering the market to buy bullion before their options expired pushed the price of gold up. Today, gold closed at US$330.60 in London.

Barrick, Lac and Hemlo Gold Mines, up 25 cents to $7.25, are all expected to report fourth-quarter results at the beginning of February. Midland Walwyn’s Mike Jalonen expects Barrick to announce record earnings of 50 cents per share, with Lac moving into the black at 1-2 cents per share. Announcing the commencement of drill programs on its Benoit and Verneuil Twp. gold properties in Quebec, Freewest Resources added 8 cents to $1.90. Minnova, finishing the week down 63 cents to $14.50 after touching a new 52-week low, is earning a 51% interest in the Benoit project. Although diamond shares continued to languish early in the week, they picked up steam toward the end of the report period on news of upcoming drill programs in the Northwest Territories.

Favorite Dia Met Minerals added 50 cents to close the week at $33.75 and jumped to $36 today. SouthernEra Resources tacked on a nickel to $3.30, while Lytton Minerals touched a new 52-week high of $2.28 for a gain of 21 cents. Aber Resources shed 2 cents to $1.88.

CDN-listed Regal Goldfields, announcing the discovery of a macrodiamond in its A-4 kimberlite pipe near Kirkland Lake, Ont., gained 10 cents to close the week at $1.95.

Issues connected to the speculative Venezuelan gold play remained strong, with Queenstake Resources picking up another 68 cents to $3.60 and Equity Reserve almost doubling to $2.40.

Shareholders of Asbestos Corp. are biting their nails in anticipation of a ruling on the 1982 takeover of the company by the Quebec government. One analyst suggested Asbestos Corp., which closed up $2.25 at $19, could soar to as high as $144 if the court rules that Quebec broke the law when it failed to make a follow-up offer to minority shareholders during the takeover. Asbestos Corp. added another $3 today.

Announcing that its 60% owned Van Stone operation has been put on hold until zinc prices improve, Equinox Resources gained 10 cents to $1.95. Zinc finished the week unchanged at 48 cents, compared with 53 cents at this time last year.

With hopes of becoming a major copper producer in Mexico, Exall Resources added 45 cents to $1.50. The company has also applied for a licence to mine an alluvial gold-diamond property in Guyana.

Adding 12 cents to 33 cents, Laurasia Resources has agreed to option a 1,000-sq.-km base and precious metal property in southern Portugal. To earn a 50% interest in the property, a Laurasia subsidiary must spend $14 million on the property, complete a feasibility study, provide preproduction financing and issue 12 million shares over four years.

Also working overseas, Cominco Resources International says high-grade ore reserves at its Cerateppe copper property in Turkey have jumped to 1.2 million tonnes grading 10% copper. Cominco, which edged up 5 cents to $2.20, says it anticipates an early production decision for the project. Off 6 cents to 23 cents, Joutel Resources has entered into an agreement to acquire five claim groups in Pense and Mulligan twps., southeast of Kirkland Lake. The junior plans to begin diamond exploration on the properties immediately. Joutel tacked on 5 cents to 28 cents today.