STOCK MARKETS — Resources lag as TSE shows recovery

Led by the real estate and communication subgroups, the Toronto Stock Exchange recovered strongly during the trading period Dec. 20-27. The TSE 300 composite index rose 192.41 points to close at 5,902.61, but its 3.4% gain on the week didn’t extend to the mining subgroups, which both rose at a pace well behind the other sectors. Because of the midweek holiday, trading volumes were light.

Currency markets were quiet. The Canadian dollar, at US73.08 cents, was four basis points lower on the week. It was little-changed against the other major foreign currencies, except the skyrocketing pound.

On the London bullion markets, gold was 40 cents higher at US$369.60 per oz., silver was unchanged at US$4.88, and platinum slipped $1.25 to US$370.25.

Speculation that some European central banks may be planning sales of gold reserves continued to depress the prices of precious metals.

The gold and precious minerals subgroup added 186.57 points to reach 11,361,52. Bre-X Minerals was the most actively traded gold, finishing 15 cents higher at $22.15. TVX Gold was active and 30 cents higher at $10.55, Franco Nevada Mining added $2 to close at $60.75, and Euro-Nevada Mining tacked on $1.70 to finish at $40.20

Most of the base metals had an uneventful week on the London Metal Exchange, with copper 1 cents lower at US$1.01 per lb., and lead and zinc both essentially unchanged. Nickel, on the other hand, took another 14 cents fall to finish the report period at US$2.85 per lb. Nickel stocks in the LME’s warehouses have been increasing steadily, putting a damper on the spot price, though future prices remain higher.

The TSE metals and minerals subgroup added 132.23 points to finish Dec. 27 at 5,226.98, a gain of 2.6%. Inco was the most active of the big miners, sliding $1.10 lower to close at $43.80. Other actively traded stocks in the subgroup were Cameco, which gave up 5 cents to finish the week at $54.70, and Noranda, which was 5 cents higher at $30.

Among the week’s more thinly traded issues, Inmet posted a gain of 35 cents to close at $6.75, and Cominco was up 25 cents at $33. Sherritt, newly returned to the subgroup, was 10 cents better at $8.10.

On the Toronto junior board, trading was heavy in Black Swan Gold, which added 5 cents to close at 70 cents. The company’s board has recommended that the shareholders approve the takeover of its Brazilian partner, Sam-Sul America Mineraao, which would give Black Swan full ownership of the Cata Preta property in Brazil.

Corriente Resources continued to rise, finishing 45 cents higher at $15.05.

There has been no news from the company since an Argentine court confirmed the company’s title to the Samenta property in Salta province. Drilling also continues in partnership with BHP at the Taca Taca prospect in the Chilean Andes.

Rea Gold, which signed a letter of intent to purchase the Pitangui gold property in Minas Gerais state, Brazil, from a subsidiary of Minorco, rose 14 cents to close at $1.69. Also on the move was Golden Rule Resources, up 35 cents to $5.45. The company holds an interest in Vancouver-listed Hixon Gold’s property in Ghana.

Off 4 cents to close at 21 cents was Great Lakes Minerals, which announced a reorganization plan that would move its Mexican operations, including the producing Lluvia de Oro gold mine, into a new company to be financed by a rights offering to Great Lakes shareholders. The Grouse Creek silver mine in Idaho would remain in Great Lakes, which would then be debt-free.

On the Montreal exchange, QEX Resources rose 30 cents to close at 70 cents.

The company completed a public offering of 2,700 units at $1,000 per unit, with each unit consisting of 3,300 shares and 3,300 warrants exercisable at 45 cents until June 15, 1998. The company stated it was in discussions with one of the subscribers to the offering for additional financing for property acquisitions overseas.