STOCK MARTKETS — Joint venture formed for Holloway gold

It was not a great week for the precious metals gold and platinum. The former fell by almost $10 while the latter succumbed to the protests of striking workers in South Africa.

Although the gold price tumbled, The Toronto Stock Exchange composite 300 index managed a gain of 14.5 points during the holiday-shortened week ended Aug. 4. Gold, which was approaching US$360 per oz. last week, fell to US$352.90 in London by presstime. The TSE’s gold and silver sub-index fell drastically by almost 243 points, as the much ballyhooed gold rally fizzled. In South Africa, millions of black workers remained at home during the 2-day strike called by the African National Congress to demand a multi-racial government. Platinum, which hit a high during the report period of US$384 per oz. in New York, dropped to US$377. South Africa produces the majority of the world’s platinum and there was fear mine operations might be disrupted. Hemlo Gold Mines, Freewest Resources and CDN-listed Teddy Bear Valley Mines announced the formation of a joint venture for the purpose of funding and managing the Holloway gold project in northeastern Ontario. Hemlo Gold, which slipped 75 cents to $9.50, will be the operator of the venture, which is subject to regulatory approval. Underground work is planned. The joint venture effectively “unitizes” a portion of the Lightning zone containing the known reserves that straddle the boundary between the Holloway property owned by Hemlo Gold and Freewest, and the Teddy Bear property in which all three companies have an interest. Freewest jumped 22 cents on the week to $2.35.

Hemlo Gold’s major shareholder, Noranda came up smiling when it announced first-half net earnings of $49 million, compared with $33 million for the same period last year. Second-quarter earnings of $32 million were well up from last year. In particular, the company’s mining and metals group put in an excellent showing. The resource giant closed up 13 cents to $19.38. Nickel producer Falconbridge, jointly owned by Noranda and Swedish firm Trelleborg, recorded 6-month earnings of $42.2 million, up from $34.4 million for the same period in 1991. Second-quarter earnings of $13.8 million were up $3.9 million from last year.

From northeastern Ontario, Deak Resources and Cyprus Canada reported completing agreements which will allow Cyprus to commence a $3-million underground exploration program at Deak’s Kerr mine at Virginiatown. Cyprus may earn a 50% interest in specific portions of Deak’s claim group south of, adjacent to and below Deak’s present mining operations. Deak slipped 3 cents to 27 cents.

Gold producer Agnico-Eagle Mines reported first-half output of 85,386 oz. from its Quebec operations. The company declared a net profit of $2.2 million for the six months compared with a loss of $3.7 million last year. Agnico was off 63 cents on the week to $5.75.

Another gold producer, Northgate Exploration, said 52% of debenture-holders voted to change the retraction terms of the company’s $13,710,000, 7% convertible subordinated debentures, but because a required vote of 66.7% was not received, the retraction terms will not be changed. Northgate, which gained a penny to 85 cents, said other alternatives of providing liquidity to debenture-holders will be examined.

Metall Mining, up 25 cents to $13.75, reported that a major contract has been awarded for construction of a 600,000-tonne-per-year processing plant for treating complex sulphide ores at

the Cayeli copper-zinc project in northeastern Turkey. The contract is worth more than US$50 million. Metall is a joint venture partner in the project with a Turkish state-owned company.

The TSE today (Aug. 5) traded almost 22.5 million shares worth $247 million and closed down almost 20 points. Preliminary figures for July indicate more than 564 million shares were traded on the TSE worth $6.6 billion.