STOCK MARKETS — Rio Algom receipts popular despite uranium

Active trading in receipts issued by Gordon Capital kept Rio Algom among the volume leaders on The Toronto Stock Exchange during the week ended July 7, despite concern over potential cleanup liabilities at Rio’s uranium operations.

Given the chance to pay in three separate instalments for 22.5 million Rio Algom shares formerly held by RTZ, investors are rushing in to buy the stock at a big discount to this week’s $16.25 trading price.

Although those same investors are expected to benefit from any near-term increases in the price of copper, analysts are quietly wondering about the long-range impact of the Elliot Lake cleanup costs.

Analyst Raymond Goldie of Richardson Greenshields of Toronto said Rio Algom will continue to move with copper which climbed to US$1.14 per lb. today, July 8, from last week’s 1.11 level. But the eventual cost of cleaning up tons of radioactive tailings could be a drag on the copper-uranium company, he said. Among copper issues, Metall Mining reached a high of $14.25, compared with its low of $10. Arimetco International moved up 5 cents to $4.30, while Aur Resources dropped by 5 cents to $3.10.

Concern over second-quarter earnings and the state of the U.S. economy failed to prevent Toronto’s composite 300 index from posting its third gain in four sessions today. The index scratched out a 2.09-point gain to finish at 3418.38 after 16.3 million shares valued at $270.4 million had changed hands.

U.S. economic woes sparked a selloff that drove the silver price down to US$3.91, its lowest level since December, 1991. But this week’s US$4.30-per-oz. upswing in the price of gold resulted in some brisk trading of precious metals stocks and sent the gold-silver index up 18.43 points to 5098.29 from last week’s 5034.89 level. A firmer gold price took Pegasus Gold to a 52-week high of $18.12 from an $11 low point. However, Pegasus lost some of that ground to finish the week at $17.63.

Also touching new highs were the preferred C shares of International Corona. They advanced $17.25, up from a low of $11. Corona common shares were even today at $5.50. Corona and affiliates now hold 55% of Stikine Resources after minority shareholders tendered 412,682 shares to a recent offer. Placer Dome, which closed up 13 cents at $12.75, holds 44%.

Shares of Societe Miniere Louvem gained 5 cents today to $3.40, after the 52% owned Noranda affiliate hatched its plan to spin out a new company titled Novicourt to own Louvem’s 45% interest in the Louvicourt Twp. copper-zinc deposit east of Val d’Or, Que. The reorganization paves the way for Noranda to raise its $112-million share of financing for the huge Louvicourt project which is targeted for production in 1995.

News that Kennecott is extending its influence on the Lac de Gras diamond camp via a $6-million option agreement with SouthernEra Resources didn’t have much impact on the junior or any of the other Northwest Territories diamond players. SouthernEra closed at $1.55, down from last week’s $1. 75 level, while Aber Resources finished at $1.75, compared with $1.83 a week ago.

Having won a reprieve on repayment of a US$12.1-million loan from Elders Finance Inc., Audrey Resources is rumored to be negotiating with Cambior in a bid to finance development at its Mobrun polymetallic mine. Hopes for an agreement pushed Audrey up 5 cents to 75 cents.

The Montreal Exchange reports that the value of shares traded in June totalled $1.8 billion, up 2.2% from May and up 41.4% from the end of June, 1991.