Toronto Stock Exchange (December 23, 1991)

Placer Dome stunned investors and angered executives at International Corona during the week ended Dec. 17 by pulling out of a $240-million proposal to develop the Eskay Creek gold deposit in British Columbia.

Placer Dome’s decision not to increase its project interest to 50% from 22% was based on a 3-month due diligence review which indicated that the Vancouver company would not be able to meet its own financial objectives. Shares of Placer Dome and Corona reacted to the announcement by falling to 52-week lows of $11.50 and $4.95 respectively.

The week’s second largest trader with over two million shares, Placer Dome lost more ground today, Dec. 18, falling to $11.38 while Corona recovered to finish at $5.25. The Eskay Creek decision came in a week when the gold price fell by US$10 per oz. before closing at US$357.90 today, Dec. 18, in London. Analysts attribute the slide in both gold and silver prices to speculative selling on the New York Commodity Exchange. Silver fell by 12 cents in the report period to US$3.89 an oz. and platinum yielded a whopping US$19.35 per oz. to close at US$348.75.

After sliding for much of the week, Toronto’s composite 300 index was up 7.54 points today to 3332.62 on a volume of 28.3 million shares valued at $281.2 million. Active issues included Inco which gained 25 cents on 742,414 shares. Central Crude perked up after the Toronto junior signed a preliminary agreement to purchase Muscocho Explorations and Flanagan McAdam Resources’ 75% interest in the Magnacon mine and mill near Wawa, Ont.

Central Crude is proposing to pay $2 million cash and issue 600,000 shares and use the facility to process ore from its Eagle River gold project. Shares of Central Crude advanced 5 cents to $1.45 while Hemlo Gold, which owns the remaining 60% of Eagle River, climbed 13 cents to $10.50. Viceroy Resources was this week’s volume leader after Hemlo Gold sold 1.8 million common shares for $8 million. Hemlo said it will report a fourth-quarter after tax loss of $8 million on the sale. Viceroy was unchanged at $4.30 after 2.4 million changed hands in the report period. Dayton Developments was also stalled at $2.52 following a week of activity sparked by news of financing commitments for its Andacollo gold project in Chile. Chile’s state-owned Banco del Estado has agreed to commit US$10 million of a US$30-million syndicated bank project financing and is attempting to syndicate the balance with five other Chilean banks. Reflecting developments at its Yerington copper mine in Nevada, Arimetco International is once again attracting investor interest as indicated by the 20 cents spike in its share price. The company has commissioned a new 65,000-lb.-per-day solvent extraction, electrowinning plant at Yerington and the facility is expected to reach full speed by April, 1992. Trading at $3.50, Arimetco is $1 shy of its 52-week high point. The low is $1.25. Fort Knox Gold Resources was relatively quiet this week as drill crews at the company’s Shining Tree, Ont., nickel play took a Christmas break. Trading on just 31,200 shares today, the issue was off 5 cents and closed at $1.20. The big drop from a high of $3.30 reflects investor disappointment in assays from three holes released from Fawcett Twp. two weeks ago.

Meanwhile, TSE says it is conducting a routine investigation of trading in Saskatoon-based Claude Resources after the company said it was suspending dividends on its preferred shares. Rocked by the announcement, Claude fell as low as $1.10, but as company executives negotiated with creditors owed $5 million, the issue recovered to finish at $1.63.

Shares of MVP Capital made the active list after holders of its convertible Swiss bonds gave the green light to a reorganization plan enabling them to exchange the bonds for cash and preferred shares of MVP. Trading at 5 cents this week, MVP expects to eliminate all debt (except that relating to its Valdez Creek project) by redeeming the bonds.

In other news, Platinova Resources hit a new high of 85 cents this week. Shares of Hudson Bay Mining and Smelting advanced to $4.95 earlier in the report period after the company commenced a program to reduce sulphur dioxide emissions at its Manitoba smelter. The issue slipped 10 cents today to $4.80.