STOCK MARKETS — Resource stocks dip as markets flatten out

An unstable dollar brought interest rate shivers to market traders last week, but few really lost their nerve as the Toronto Stock Exchange spent the week in a slow decline. The TSE 300 composite index closed the report period ended Sept. 20 at 4538.50, down 74.71 points or 1.6% from a week prior.

Widely differing predictions over the result of the Quebec referendum and its aftereffects sent the loony on a thrill ride in international currency markets, diving to nearly US73 cents on Sept. 14 and then recovering to US73.58 cents by Sept. 19.

Predictions that the bank rate would have to rise in order for the dollar to stabilize were being made as early as Sept. 14. But by the time of the Tuesday treasury bill auction, five days later, the currency looked stronger, following a 3-day rally, and the rate went up only three basis points to 6.91%.

Precious metals prices were lower, with gold falling US40 cents on the week to US$385 per oz. at Wednesday morning’s London fix. Platinum slid US$1.90 to a Wednesday morning fix of US$436.85 per oz. Silver took a US6 cents hit and was fixed at US$5.48 per oz. Gold and precious metals stocks on the Toronto market followed the decline, as the gold sub-index closed Sept. 19 at 10669.55, representing a loss of 434.41 points or 4.1%.

Among the TSE stocks to drop sharply, Placer Dome lost $2 to finish at $35.50, and Barrick Gold slipped $1.63 to $34.63. Echo Bay was down 75 cents to finish the report period at $14.75, while Cambior closed at $14.38, off 63 cents. Most other major and medium-sized gold producers lost fractionally, with the exception of Royal Oak Mines, which ended the report period up 12 cents to $5.63.

In base metal markets, spot prices fell for nickel, lead and copper, while zinc managed to hold its ground. The biggest loss was posted by nickel, down 7 cents a pound on London Metal Exchange spot markets. Lead’s London price was off 1 cents to 26 cents per lb.

TSE metals and minerals were also weaker. The sub-index was at 4908.27 at the close on Sept. 19, down 263.52 points or 5.4%. The large integrated miners, who had led last week’s gains, suffered most, with the largest losses hitting the two big nickel miners. Inco was off $3.25 to close at $46.75, and Falconbridge lost $1.63 to close at 29.25. Noranda finished the report period at $27.75, down 50 cents on the week, while Cominco, up strongly in the previous week, lost 75 cents to close at $28.

Diamond Fields Resources, still the subject of takeover rumors, announced a 4-for-1 stock split. Running against the tide in base metals, it picked up another $1.12 to close at $92.

Nuinsco Resources announced that drilling on its Rainy River project had cut copper-nickel sulphide mineralization with precious metal values. Its stock responded by running up 54 cents on a volume of 4.5 million shares. The intersection is 7 metres of 1.15% nickel and 0.7% copper, plus 1.78 grams gold, 0.91 gram platinum and 2.48 grams palladium per tonne.

Geddes Resources continued to exhibit strength, rising 5 cents on the week to $1.60 on a volume of 8 million shares. Speculators continue to wait for a takeover bid from Royal Oak Mines following resolution of the Windy Craggy dispute. Also trading heavily was Black Swan Gold Mines, which had released results on its Brazilian gold prospect, Cata Preta, last week. Black Swan had a 3 cents loss to close at 28 cents as some holders cashed in.

Manson Creek Resources was up 23 cents to 58 cents on news that Vancouver-listed Cumberland Resources had discovered a zone of copper-nickel sulphides on the Parker Lake project in the Rankin Inlet area. N.W.T. Manson Creek and Comaplex Minerals have 25% stakes in the property; the latter was unchanged at 70 cents. The new zone, dubbed Suluk, has been sampled on surface where it averages 3 ft. wide. It holds an average of 3.82% nickel, 2.93% copper and 0.17% cobalt.