STOCK MARKETS — Rising dollar, bank rate help to bolster

A healthy rise in the Canadian dollar and a stable bank rate helped shore up the TSE over the 5-day report period ended Aug. 9. The composite 300 index closed down 7.46 points to end the period at 4,186.82.

The strengthening Canadian dollar helped stabilize the Bank of Canada rate. It was unchanged at 5.7% at its weekly setting on Aug. 9, after six consecutive declines from its peak of 7.09%.

The Canadian dollar closed at US72.85 cents, a gain of US0.85 cents on the week. The rally in the dollar appears to have been sparked by a recent poll showing the Quebec Liberal party closing in on the separatist Parti Quebecois in voter support for the Sept. 12 election.

Gold bullion continued to languish, with the London afternoon gold fix on Aug. 10 set at US$378.30 per oz., virtually unchanged from a week ago. The struggle for control of million-ounce gold producer Lac Minerals continues to unfold as one of the contenders, Royal Oak Minerals, announced that it was upping its bid. The value of the new offer is about $2.4 billion or slightly more than $16 per share.

The news helped Lac hit a new 52-week high of $14.75, before easing back to close at $14.13, off 13 cents on the week. Shares of Royal Oak lost 25 cents to close at $5.63.

Other potential suitors — American Barrick Resources — TVX Gold and Kinross Gold have kept out of the spotlight. A Barrick spokesman said his company has no intention of changing its offer, while a spokesman for TVX said the TVX-Kinross offer is still on the table. Barrick shares lost 25 cents and ended at $30.63. Shares of both TVX and Kinross remained unchanged at $7.87 and $5.38, respectively.

Other senior gold producers were mixed on the week, with Placer Dome down 75 cents to $27.38, Hemlo Gold Mines down 38 cents to $12.75 and Echo Bay Mines unchanged at $15.25. Rumors have recently been circulating that Echo Bay also plans to make a bid for beleaguered Lac.

New drill results from the Lewis Ponds project in New South Wales, Australia, helped give Tri Origin Exploration a boost. Significant results included a 62-ft. intersection that averaged 0.02 oz. gold and 1.2 oz. silver per ton, 0.17% copper, 0.85% lead and 1.94% zinc. Tri Origin gained 15 cents to finish at $1.45.

In addition to making a new discovery near the Kodiak project, Wheaton River Minerals reports it has been issued a mine development certificate from the British Columbian government for its heap-leach project. Despite the good news, Wheaton River shares dropped 35 cents to $2.15.

Rayrock Mines, a unit of Rayrock Yellowknife Resources, has entered into a joint venture with U.S.-based Atlas Corp. to explore the Gold Bar property near Eureka, Nevada. By spending US$1.5 million on exploration and development, Rayrock can earn a 60% undivided interest in the property from Atlas. Shares of Rayrock remained unchanged at $14.75.

Shares of Joutel Resources remained unchanged on the week at 43 cents, this despite news that the company had completed a share purchase agreement with Teck. Under the deal, Teck purchased 1,538,462 Joutel shares at 65 cents each, representing an investment of $1 million. Teck has the option to invest an additional $4.5 million during a 3-year period. The share purchase allows Teck the right to earn a 50% interest in three of Joutel’s mineral properties in Cuba. Teck’s B shares were unchanged at $22.50.

The recent announcement that Kennecott Canada was stopping work on its highly touted Tli Kwi Cho kimberlite discovery in the Northwest Territories sent investors scurrying for cover as most diamond stocks moved lower in active trading.

Dia Met Minerals was the big loser, with the A shares dropping $4.50 to $15, while the B shares shed $1.13 to close at $19. Other diamond stocks losing ground included Aber Resources, which shed $3.88 to $10.13, SouthernEra Resources, off $2.75 to $3.25, and Ashton Mining Canada, down 29 cents to $1.76. Adex Mining bucked the trend, edging up 3 cents to 43 cents on a volume of more than 4.1 million shares.

Overseas diamond explorers were unphased by the Kennecott news, with United Reef gaining 23 cents to 85 cents, while Redaurum tacked on 25 cents to close at $1.95. Both companies recently announced that they had signed deals to acquire new properties in Africa.