Toronto Stock Exchange (October 07, 1991)

Sparked by a lack of industrial demand and new automotive technology, the steady decline in the price of platinum finally caught up with Pat Sheridan during the week ended Oct. 1.

Strapped for cash and facing a lawsuit over a Northern Ontario palladium-platinum project, Madeleine Mines’ president was forced to sell a key block of stock to Oaklahoma oil executive George Kaiser. Having steadily increased his interest to 36%, Kaiser is expected to move quickly to exert his influence and sort out a legal dispute with the Ontario Environment Ministry concerning Madeleine’s Lac des Iles project. The surprise development coincided with a US$6.25-an-oz. drop in the price of platinum, which at US$351.25 is trading at a discount to gold. Pressured recently by uncertainty in the Soviet Union, gold fared better this week after a Soviet economist revealed that his country is sitting on 240 tonnes of gold reserve. Because the Soviets were thought to hold much more gold in their vaults, the yellow metal moved up by US$3.60 per oz. during the reporting period to close at US$356 today, Oct. 2, in London. However, many gold issues were slow to react to the Soviet announcement which, if true, reduces the amount that can be sold to pay for the country’s newfound independence. LAC Minerals, the most active of the big gold issues this week, was unchanged today at $8.63, after giving up 13 cents this week. A gain of 13 cents today failed to make up for the 63 cents given up by Placer Dome this week. While it also made the active list, TVX Gold was unchanged at $4.25.

Cambior was among the winners this week after it announced that two banks have agreed to underwrite a gold loan for up to US$120 million to finance development of the Omai gold project in Guyana. Annual production of 255,000 oz. is expected to launch Cambior into the top tier of North American gold miners. Cambior added 38 cents this week to close at $9.63.

Speculation on results from Granges Inc.’s Unuk River project in northwestern, British Columbia sparked investor interest and put Granges among the most active stocks this week. But the issue gave up 22 cents to end that week at $1.43 when results proved disappointing.

Canamax Resources was unchanged at 30 cents after Falconbridge Gold announced that it isn’t proceeding with Canamax’s Bell Creek gold mine and mill in northern Ontario under terms announced two months ago. However, the two companies are still talking, according to Falconbridge.

Hopes that demand for base metals will pick up now that the recession is over were dashed by economic indicators released in Canada and the U.S. this week. The Royal Bank predicts that Canada’s economic recovery will be fragile and will move at only half the normal historic rate. U.S. indicators show that economic growth has been slower than expected.

Toronto’s 300 composite index reacted today by edging down 1.67 points to close at 3393.59 following back-to-back gains. Changing hands were 21.9 million shares valued at $217.8 million.

While it topped the active list this week with 1.3 million shares, Inco continues to drift away from a summer high of US$43.88. After losing $1.25 during the reporting period, Inco closed at US$34.75 today.

Noranda closed at $17 after giving up 38 cents throughout the week, while Cominco finished at $21.25, down 25 cents.

Rio Algom shares advanced by 13 cents today to close at $15.50 after the company announced plans to close its East Kemptville tin mine at Yarmouth N.S., and lay off 220 employees. The shutdown will result in a loss of $12.1 million or 28 cents a share during the third quarter to cover costs associated with the closing and operating losses.

By contrast, Curragh Resources didn’t trade this week even though the British Columbia government has given Curragh the green light to develop its Stronsay zinc-lead deposit northwest of Fort St. John. Last week Curragh held a ribbon cutting ceremony at its Sa Dena Hes lead-zinc mine near Whitehorse, Yukon. Finally, the unfavorable market conditions continued to take its toll on a number of issues including Aur Resources which bottomed at $2.80. Audrey Resources also sank to a new low for the year of $1.30. Societe Miniere Louvem and affiliate St. Genevieve Resources bottomed at $3.15 and 39 cents respectively.