STOCK MARKETS — TSE stages pre-Christmas rally

A pre-Christmas rally enabled the Toronto Stock Exchange to post a modest gain over the 3-day report period ended Dec. 27 (Canadian markets were closed on Dec. 26 and 27). The composite 300 index rose 39.07 points to close at 4,193.20.

The Christmas Eve rally marked the eighth straight day of gains on the TSE, after several weeks of losses which saw many issues hit record lows for the year.

The sub-groups for metals and minerals and for gold and precious metals posted gains on the week. The metals and minerals index was up 38.56 points to 4156.19, while the gold and precious metals index jumped 47.27 points over the week to close at 9179.66.

Despite the activity in the gold sector, bullion was virtually unchanged, with the London afternoon fix on Dec. 28 set at US$381.75 per oz., down 30 cents from a week ago.

At presstime, the Bank of Canada rate was expected to rise to a new 2-year high, as continuing pressure on the Canadian dollar takes its toll on interest rates. The bank rate is expected to jump about 20 basis points over last week’s close of 7.04%.

The Canadian dollar fell to an 8-year low of US71.46 cents on Dec. 24, after the Mexican peso was devalued.

Senior gold producers were mixed on the week, with American Barrick Resources up 13 cents to $30.13; Echo Bay Mines dropping 13 cents to $14.63; and Placer Dome moving up 75 cents to $29. Hemlo Gold Mines was unchanged at $13.25. Montreal-based Cambior derived some Christmas cheer this week from the Omai gold mine in Guyana. As a result of drilling and better-than-expected mine production recoveries, proven and probable reserves at Omai have risen by almost 40% relative to the 1990 feasibility study. Reserves now stand at 62.5 million tons averaging 0.04 oz. gold per ton. Also at Omai, the company and partner Golden Star appear poised to proceed with a US$58-million mill expansion project. Should the feasibility study for the expansion receive the necessary approval, mill capacity will jump by 50% to 19,800 from 13,200 tons per day. Cambior shares rose a quarter to close at $15.13 while Golden Star shares dropped to $11.13, off 63 cents.

Former litigants TVX Gold and Gold Reserve have agreed to settle their differences over the Brisas concession in Venezuela. The agreement calls for Gold Reserve to issue 1.5 million shares and 500,000 share purchase warrants to a subsidiary of TVX in consideration for the TVX subsidiary releasing all rights and claims to the concession.

In other news, TVX has joined forces with an Australian mining company and made a bid in excess of US$40 million for two gold mines in northern Greece. Shares of TVX were up 13 cents at $9, and Gold Reserve shares were up $1.75 to close at $11.75.

Metal stocks continued to shine as the year drew to a close. Global economic recovery and investment fund speculation have led to increased demand for aluminum, copper, nickel and zinc.

Aluminum and copper are trading at their highest levels since 1989. In the fourth quarter of 1994, the average aluminum price jumped 69% above levels from the same period in 1993. The price was reported as US82.3 cents per lb. In the same period, copper rose 66% to average US$1.25 per lb., while average nickel prices were up 62% to US$3.46 per lb.

Zinc was the poorest performer, rising only 18% from a year ago. Metal mining stocks performed well on the week, with Inco up 25 cents to $40.75; Cominco adding 13 cents to $25.13; Falconbridge tacking on 25 cents to $24.13; and Noranda and Sherritt each gaining 13 cents to close at $26 and $13.50 respectively.

The new gold discovery in northern Quebec by Vancouver-listed Murgor Resources continues to generate interest. This week, Exploration Minieres du Nord announced it has acquired a 29-claim block contiguous to the northwestern portion of the Murgor property. Minieres du Nord hopes to begin exploring the property early in 1995. Despite the good news, shares in Minieres du Nord hit a new 52-week low of 14 cents before settling in to close the week at 19 cents.