Toronto Stock Exchange (December 02, 1991)

Activity during the week ended Nov. 26 provided more evidence that the climate is improving for junior mining issues.

Shares of Fort Knox Gold, for example, shot up to a new 52-week high of $1.75 as investors anticipated more drill results from the Inco affiliate’s Fawcett Twp. nickel discovery at Shining Tree, Ont. News that drill core is en route for assaying in Sudbury, Ont., put Fort Knox among active issues (albeit briefly) as more than 1.2 million shares changed hands. Great Lakes Minerals also hit a high of 65 cents after optioning a large chunk of its Keweenaw copper claims in northern Michigan to Noranda in return for US$4 million in expenditures over four years. The attendance at Great Lakes’ recent show-and-tell, combined with earlier advances in the price of Arimetco International shares, indicates that the market is receptive to emerging copper situations. Arimetco ended the week at $3.60, down 10 cents. However, most of the action was in the gold sector where a US$4.55 spike in the price of the yellow metal drove American Barrick Resources and royalty specialist Franco-Nevada Mining to new highs. Royal Oak Mines emerged as number two on the active list after 3.1 million shares traded. Closing at US$367.10 per oz. in London today, Nov. 27, gold is fast regaining its status as a haven in times of uncertainty.

Analysts attribute the metal’s current strength to a western decision to defer US$3.6 billion in Soviet debt and to a slump in North American markets. They say the agreement by the Group of Seven nations to grant the Soviet Union a 1-year debt deferral reduces concern that the USSR will be forced to sell off gold to pay for its newly found independence.

Among gold issues, LAC was the week’s third highest trader behind Royal Oak and Sherritt Gordon. It added 13 cents to finish at $9.38 today. LAC sold 11 million common shares recently at $9.63 to raise $105.9 million for exploration and development. After hitting a high of $23.13, Franco-Nevada retreated to $22.50. At $29, American Barrick was also shy of its $29.88 high point. Royal Oak gave up 5 cents today to close at $1.50.

The Dayton Mining issue saw some activity after Banco del Estado, Chile’s state-owned bank, agreed to commit US$10 million toward a $30-million syndicated bank project financing for the Andacollo gold project. Five other Chilean banks are participating with Banco del Estado in syndicating the remaining US$20 million. Dayton closed at $2.58, up 3 cents. A loss of confidence in the Canadian dollar and weaknesses in the bond market sent the composite 300 index to its worst single-day loss since Aug. 19, the date hardline communists attempted to overthrow Soviet President Mikhail Gorbachev.

Today, the index was down 8.20 points to 3440.12 after 21.5 million shares worth $208.6 million changed hands. Inco gave up 39 cents as the metals and minerals index fell by 42 points. Noranda was up 13 cents.

Resumed discussions between Audrey Resources and Billiton Metals Canada couldn’t prevent Audrey from sinking to a low this week of $1.13, compared with its high of $4.10. Audrey says it is talking with Billiton and other companies in a bid to sell its Mobrun mine assets.

This week’s US$1.10-per-oz. increase in the price of platinum helped push the Madeleine Mines issue up 15 cents today to $3.05. With a new controlling shareholder in place, Madeleine is attempting to sort out legal problems and bring its Lac des Iles palladium/platinum property into production. Also, Galactic Resources has amended the terms of its agreement to sell its 48% interest in the Ridgeway gold mine in South Carolina to Placer Dome for US$36.3 million. Subject to a waiver by Kennecott Corp., Placer Dome will pay $16-million cash and assume responsibility for $20.3 million in mine-related debt.