STOCK MARKETS — Resources drop on TSE as election pushes dollar higher — Base metals, golds off in quiet market, platinum group metals show strength

Merchandising, communications and consumer products showed strength on the Toronto Stock Exchange, though the resource industries were all lower during the report period ended June 3. The TSE 300 composite index was down fractionally to 6,432.72 points, a loss of 9.82 points over the five trading days.

Both the base metals and golds lost ground, as did the forest products sector and the oil and gas producers. Volumes were generally moderate to heavy, except for light trading on election day, June 2.

The Canadian dollar rose slightly against the U.S. dollar over the same period, pushed higher by favorable sentiment on the results of the June 2 general election. The Loony settled at US72.69 cents, up 42 basis points against the greenback. It also gained against the other major currencies.

Gold was pushed to the sidelines in the London bullion markets, where platinum added $20.50 in volatile trading to close at US$425 per oz. on the morning of June 4. Its stablemate, palladium, made it to US$210 per oz., a gain of $22, on continuing fears of supply disruption from Noril’sk in Russia, and now Sudbury, where Inco workers voted down a proposed contract despite a recommendation from their union.

Gold was fixed at US$342.40 per oz. on the morning of June 4, down $2.30 from a week before, and silver shed 3 cents to finish the report period at US$4.73 per oz.

The TSE gold and precious minerals sub-group lost 3.6% of value over the report period, closing at 9,080.86 on June 3. TVX Gold was the volume leader, with 4.2 million shares riding the tape, to a close of $8.35, down 40 cents.

The big guys were also down: Placer Dome fell $2 to $23.60 and Barrick Gold dropped $1.65 to $33.55. The only significant exceptions to the weakness in the golds were royalty holders Franco-Nevada Mining, which added $1.05 to close at $72.75, and Euro-Nevada Mining, $1.25 higher at $41.50.

The base metal markets were generally weaker, with nickel off 9 cents, to $3.18 per lb. in London’s June 4 ring session. News of the Inco strike, however, bolstered the price, which had dipped to $3.12 the day before.

Copper, aluminum and zinc were all off by 2 cents per lb., and lead was down a fraction of a cent.

The major base metal producers were broadly lower, with Inco down $1.30 to close at $44.65. Cross-Town rival Falconbridge was $1.35 lower at $30.05, whereas parent Noranda fell $1.65 to finish the report period at $30.65. Rio Algom lost $1.15, closing at $36.35, and Cominco slid 80 cents to $38.90. Aur Resources bucked the trend, adding 45 cents to finish at $7.60, as did Cameco, which added $1.80 to close at $53.50.

The most active of the Toronto juniors was Crystallex, which added $2.35 to finish at $6.60. Investors appeared to be speculating that the company has a valid legal claim to a portion of Placer Dome’s Las Cristinas property in Venezuela. Also on the active list was T&H Resources, 2 cents higher at 47 cents, Brazilian explorer Ourominas Resources, off 2 cents to $1.33, and TVI Pacific, which slid 8 cents to 35 cents.

Birim Goldfields fell 23 cents to a close of 50 cents, possibly as investors shunned West African explorers in the wake of the problems faced by Golden Rule Resources (which was 5 cents lower at $2.80).

Pure Gold Resources was 2 cents higher at 36 cents, whereas its diamond-exploration partner, Ashton Mining of Canada, picked up 30 cents to finish at $5.15.

As usual, the Montreal exchange provided a couple of unexplained price moves: Augyva Mining added 6 cents to close at 16 cents and Canspar Resources saw its stock climb 15 cents, to 50 cents.