STOCK MARKETS — Strengthening gold sector bolsters TSE

Strength in the gold sector helped propel the Toronto Stock Exchange higher over the 5-day report period ended Dec. 20. The composite 300 index jumped 109.72 points to close at 4,154.13.

The gold and precious metals sub-group gained 20.69 points over the week to close at 9132.39. The rise was precipitated by a slight jump in the gold price, with the London afternoon fix on Dec. 21 set at US$382.05 per oz., up US$1.55 from a week ago.

After two successive jumps, the Bank of Canada rate edged up by only one basis point to close the week at 7.04%. The modest increase put an end to the sharp upswings that saw the rate rise by 101 basis points in recent weeks. The setting came just before the U.S. Federal Reserve Board announced it was postponing any move to increase interest rates until its next meeting, scheduled for late January.

Having come under fire early in the week, the Canadian dollar settled at US71.76 cents, down a third of a cent over the period.

Senior gold producers were mixed on the week, with American Barrick Resources losing 38 cents to $30; Echo Bay Mines dropping 25 cents to $14.75; Placer Dome moving up 25 cents to $28.25; and Hemlo Gold Mines tacking on 50 cents to $13.25.

Despite a 45,000-oz. shortfall in its 1994 gold production forecast, Royal Oak Mines gained 30 cents on the week to close at $4.50. The shortfall was the result of a fire last May at its Colomac gold mine in the Northwest Territories. At full capacity, Colomac is expected to produce 170,000 oz. per year at a cash cost of less than US$275 per oz.

To cover the shortfall, Royal Oak plans to make a claim under its business interruption insurance policy.

Having completed 87,000 ft. of diamond drilling on its Fenn-Gibb property near Matheson, Ont., Pangea Goldfields has identified two major zones of gold mineralization over a strike length of 3,936 ft. The company estimates these zones contain a geological resource of 16.4 million tons grading 0.057 oz. gold, much of which could potentially be extracted by open-pit methods. Pangea lost 45 cents to close at $2.65.

News that World Wide Minerals has entered into a preliminary agreement to explore for gold deposits in China helped boost its share price. World Wide plans to enter a business combination with Tiashan Gold, which is exploring for gold in three Chinese provinces. World Wide shares hit a 52-week low of 27 cents before rebounding to end at 39 cents, up 9 cents on the week. The Supreme Court of Venezuela confirmed a lower court decision giving custodianship of the Brisas concession to a subsidiary of Spokane-based Gold Reserve. Ownership of the concession and subsequent net profits will be awarded pending the outcome of another lawsuit on the property. Gold Reserve shares moved up $1 to close at $10.

Pegasus Gold announced it has decided not to declare a year-end dividend. Instead, the company will use the funds to invest in its advance development projects. Shares of the gold producer shed $1.13 to close at $15.39. A fully subscribed rights offering grossed just under $24 million for zinc producer Breakwater Resources. The company plans to retire $15.5 million worth of debt with the balance being added to the company’s working capital. More than 11 million Breakwater shares changed hands as the company’s stock gained 2 cents to end at 12 cents.

Joint-venture partners Aurizon Mines and Louvem Mines reported successful results from exploration and development programs at the Beaufor gold project west of Val d’Or, Que. Exploration drifting and raising have led to the discovery of new veins that may lead to new ore reserves, while grades from development ore are said to be similar to historical grades. Aurizon shares added 4 cents to end at 88 cents, while shares of Louvem remained unchanged at 38 cents.

Caledonia Mining acquired a half interest in a South African gold mining company for $11.8 million. Barbrook Mines owns the mine of the same name, which has a proven and probable reserve of 297,000 tons averaging 0.055 oz. gold. Caledonia shares closed at $11.39, down 13 cents.