STOCK MARKETS — TSE levels off after a rough ride

After losing ground for three consecutive weeks, the TSE 300 index has rallied and leveled off well above the psychologically significant 4,000-point support level. For the week ended July 5, the index closed up 0.04 points to 4,053.6.

An unwillingness on the part of the U.S. Federal Reserve Board to raise U.S. interest rates allowed the Bank of Canada to cut the bank rate by 30 basis points — more than was expected.

The key rate fell to 6.62% from 6.92%, its second consecutive double-digit decline after hitting a 1-year high of 7.09% two weeks ago. However, the lower bank rate had no effect on the prime rate, which currently stands at 8%. The decline came in spite of a drop in the Canadian dollar, which closed the week at US$72.10.

For the second straight week, gold and silver stocks took a beating, with the sub-index dropping 128.9 points over our report period. The London afternoon gold fix on July 6 was US$385.50 — unchanged from a week ago. Again, Placer Dome led the slide in senior gold producers, dropping 75 cents to close at $28.75 on a volume of nearly 1.6 million shares. Lac Minerals lost 13 cents to close at $11.50; Echo Bay Mines was unchanged at $14.50; American Barrick Resources was off 25 cents to $32.38; and Hemlo Gold Mines was also unchanged at $12.

Companies in the Agnico-Eagle group all gained ground as affiliated company Sudbury Contact hit a new 52-week high on news of last week’s drill intersection. Sudbury Contact vaulted $3.63 to close at $13.87, while Agnico Eagle gained 38 cents to end at $16.83. Affiliated holding company Mentor Exploration also hit a new 52-week high, finishing up 25 cents to close at $12.25.

Vancouver-based Cathedral Gold has reported results from a 9-hole program at its Kaburi-Eldorado gold project in Guyana. The holes were drilled along strike and below the first round of drilling completed on the Hicks zone. Several of the intersections ran greater than 0.2 oz. per ton over 11.5 ft. Shares of Cathedral were unchanged at $3.05.

Toronto-based TVX Gold has signed an option agreement that will allow the company to acquire the Natividade gold property 550 km north of Brazilia, Brazil. The property hosts hundreds of shear zone-hosted gold occurrences previously worked by garimpeiros (regional miners). TVX shares lost 13 cents to finish at $8.

News of the an investment in shares of Greenstone Resources by the Emerging Market Gold Fund failed to inspire investors as the former closed at $1.90, down 20 cents. The fund plans to invest $US10 million to buy newly created preferred shares and common share purchase warrants.

Junior Granduc Mining received an additional loan of $2.5 million to help fund its share of predevelopment work at the Farley Lake gold deposit in Manitoba. The loan is being extended by Conwest Exploration and associated company Jascan Resources. Shares in Granduc edged upward by 3 cents to close at $1.23, while Conwest and Jascan lost 25 cents and 1 cents to finish at $24.50 and 80 cents, respectively.

Antares Mining jumped 11 cents to 86 cents on a volume of 573,700 shares. The company is carrying out exploration and development on its Lady Lina gold property in Zimbabwe. At the annual meeting, President Dennis Gray said he was confident the current reserve figure of 1.8 million tonnes grading 6 grams gold per tonne would be doubled by year-end.

Exall Resources hit a new 52-week low this week, losing 15 cents to close at $1.20. The drop comes despite news that a positive prefeasibilty study is soon to be released on the company’s Santo Tomas porphyry copper deposit in Mexico’s Sinaloa state. Based on a 0.2% copper cutoff, the deposit is estimated to contain more than 1 billion tonnes in all categories grading 0.33% copper.

The joint owner of Canada’s only primary platinum group metals mine, North American Palladium, has been ordered by the Ontario Court of Justice to sell the Lac des Iles mine in northwestern Ontario. The company is hopeful, however, that the $22 million incurred as expenses during the mine’s development will be repaid from the proceeds of the sale. The company’s shares rose $1 to end at $7.50.