STOCK MARKETS — Rise in gold price bolsters TSE

Spurred on by an almost continuous rise in gold prices, the Toronto Stock Exchange’s composite 300 index hit several new highs during the trading period Feb. 12-18, rising 1.8% from the previous week to hit a new record of 6,238.22. The 111.3-point jump in the TSE 300 was partly reflected in both gold and base metal stocks.

Trading volumes were heavy for most of the week, particularly on Feb. 18 when 138 million shares crossed the floor.

The Canadian dollar slipped against the greenback during the period, falling 22 basis points to hit US73.55 cents at noon on Feb. 19. Although the loony lost some ground against most of the other major currencies, it climbed against the British pound and German mark, with a respective 5 cents and 1 cents increase.

Recovering from weeks of downsliding, gold gained a hefty $9.20 to close the week at US$346.10 per oz. The increase was reflected in other precious metals, with silver gaining 38 cents to hit US$5.20 per oz., and platinum climbing a substantial $16 to finish the period at US$368.25 per oz.

Amid the rise in gold prices and the latest news on the Busang saga, the TSE’s gold and precious minerals sub-group was given a serious boost, closing the week up 364.52 points (3.4%) at 10,484.52.

Making headlines in the daily press, the Busang saga came to a conclusion late in the week with the announcement that Bre-X Minerals will keep a 45% interest in its discovery. As expected, the announcement resulted in heavy trading of the issue with 27.6 million shares passing hands. However, with several issues still outstanding, Bre-X dropped $1.45 at the end of the week to close at $20.80. Although previous heavy-weight contenders Barrick and Placer Dome were left out in the cold, both issues saw increases of 30 cents and $1.90, respectively, to finish at $35.50 and $29.05. Not surprisingly, the three companies were ranked one, two and three, respectively, in value of stock traded last week.

With a 23% interest in Bre-X, Bresea Resources was also hit hard this week, dropping 40 cents to $10.95 with 4.5 million shares traded. Unaffected by these woes, Bro-X, the unit of Bre-X that holds the company’s other Indonesian properties, climbed $1.05, or 57%, to close the period at $2.90.

Another winner last week was Minorca Resources, a possible minority interest-holder in Busang. The issue added $1.10 to its value, to finish at $5.45.

Gold’s recent success resulted in big boost for Euro-Nevada, which increased by $2.50 — the largest gain among issues with the greatest value traded. The issue finished the halt in the week’s trading at $39.40. Gold’s ripples also influenced TVX Gold, which jumped 9 cents to finish at $11.05.

Following the broad market, the base metals and minerals sub-index gained 76.49 points, or 1.4%, to close at 5486.79. On the London Metal Exchange, the base metals (with the exception of nickel) saw positive gains on their prices. The red metal was the big winner, gaining 3 cents to close at US$1.10 per lb., while zinc and lead increased by 2 cents and 1 cents, respectively, to finish at US55 cents per lb. and US30 cents per lb. Nickel dropped 3 cents to wrap the week up at US$3.49 per lb.

Among the base metal miners, Inmet Mining and Inco were big winners during our report period. The former rose $1.15 to $8.40, while the later gained a slightly smaller $1.05 to close at $47.35. Cameco reversed a 2-week drop by gaining 5 cents to rise to $51.90, while Noranda lost an equivalent amount to drop to $32.70. Both Falconbridge and Teck saw the value of their shares increase by 55 cents and 40 cents, respectively, to finish the trading period at $30.40 and $30.90.

The highest relative gain this week was seen by Montreal-listed Coleraine Minerals, which increased by 167% to 74 cents from 28 cents, with 1.2 million shares traded. The company announced positive results from its drill program on the Perron gold project in the Abitibi belt in Quebec. Coleraine is earning a 50% interest from Falconbridge.