STOCK MARKETS — Surging gold stocks lend strength to TSE

A surging gold index helped the Toronto Stock Exchange post a modest gain during the 5-day report period ended April 18. The composite 300 index rose 24.41 points to close at 4,299.39.

A sharp rise in the price of bullion caused the gold and precious metals subgroup to surge by 363.71 points, closing at 10,395.53. The London afternoon fix on April 19 was US$395.55 per oz., a gain of US$5.50.

While the U.S. dollar gets pommelled on international currency markets, the Canadian loonie continues to head higher, closing the week at US73.14 cents, up almost a penny. Despite renewed strength in the dollar, the Bank of Canada rate fell only 12 basis points to 8.18%.

Senior gold producers all gained ground on the week, with Echo Bay Mines adding 13 cents to $14.50, Hemlo Gold Mines tacking on 88 cents to $16.38 and Placer Dome, the big winner, moving up $2.25 to $34.63 on a volume of 3.6 million shares.

Year-end results for Barrick Gold, presented at the company’s annual meeting, were sufficiently positive to add $1 to the stock. For 1994, the company enjoyed record earnings of US$251 million and an operating cash flow of US$955 million. Furthermore, Barrick announced its intention to concentrate exploration and development efforts in South America. The major has already opened exploration offices in Argentina and Bolivia, and now has projects at various stages of exploration in Chile, Peru, Argentina and Bolivia. Barrick shares closed at $35.13.

Kinross Gold affiliate Pentland Firth intersected significant gold mineralization on its Allerston property near Timmins, Ont. The property adjoins Kinross’Bell Creek mine, where drilling last year identified high-grade gold veins. More than 2.4 million Kinross shares changed hands as the stock posted a 13 cents gain, closing at $8.50.

At presstime, Royal Oak Mines announced that it would acquire all the issued and outstanding shares of Vancouver-listed El Condor Resources for $4.90 per share plus one-third of a Royal Oak share. The value of the transaction is about $95 million. The cash portion of $71 million will be funded from Royal Oak’s treasury.

El Condor’s principal asset is its 60% interest in the Kemess South gold-copper deposit in north-central British Columbia. The Kemess South deposit contains minable reserves of 4.1 million oz. gold and 990 million lb. copper, while the Kemess North deposit, which is 100% owned by El Condor, contains an additional 1.9 million oz. gold and 623 million lb. copper.

Royal Oak’s offer is conditional upon various certification matters pertaining to the Kemess South property, as well as financial assistance being made available from the British Columbia government for construction and development of the project. At presstime on April 19, Royal Oak shares were trading at $4.80, down 10 cents on the day.

In a related move, Geddes Resources, owned 39% by Royal Oak, says it intends to acquire Vancouver-listed St. Philips Resources for about $37 million. St. Philips owns the other 40% interest in Kemess South. Geddes closed at 70 cents.

Diamond Fields Resources continues to reach new highs, hitting $36.75 before closing at $34.38; it was up $6.63 on the week. The initial rise in the share price was due to the release of new assay results, which continue to show excellent base metal grades and thicknesses within the main, ovoid-shaped massive sulphide body. A subsequent announcement that Teck was acquiring a 10.4% interest in Diamond Fields also fueled the issue’s rise. Under the deal, Teck will buy 3 million Diamond Fields shares for $84.4 million cash and 1 million Class B Teck shares. Teck Class B shares finished the week at $23.75, up 25 cents.

Montreal-listed Radisson Mining Resources has increased reserves at the O’Brien gold project near Malartic, Que., to 1.14 million tons grading 0.19 oz. per ton. The company, which is earning a half interest from Breakwater Resources, saw its shares gain 1 cents to close at 50 cents. Breakwater’s stock was unchanged at 10 cents.