Toronto Stock Exchange Arimetco active as investors await economic

Concern over interest rates and first-quarter earnings combined to drive some investors out of the market during the week ended April 9. Having profited from a first-quarter rally, which they fear may be over, investors are expected to wait for further economic signals, especially from the U.S. Federal Reserve Board, before making their next move. As they hedged their bets, the composite 300 index gave up 11.8 points today April 10, to mark its fourth successive decline. With 25.8 million shares worth $273.5 million changing hands the index ended the week at 3494.6.

While the price of gold and platinum moved up sharply this week, the gold-silver index dropped 28.95 points today before closing at 5380.63.

A US5 cents increase in the price of zinc helped push shares of Inco to a new 52-week high of US$40. Based on expectations of future demand increases in a tightening nickel market, base metal analysts say the metal could rise to US$6 in the fourth quarter from this week’s US$4.13-per-lb. level.

Active stocks this week included Arizona-based copper producer Arimetco Inoutput from two properties to Billiton Minerals of New York.

News of the agreement drove shares of Arimetco up to $3.50 this week on a volume of 659,633 shares, compared with the low of $1.25.

Shares of Thunderwood Resources remained on the active list as investors bet on follow-up drill program now under way at the Chibougamau, Que., base metal joint venture with Greenstone Resources. Thunderwood ended the week down 1 cents at $1.33.

In company with other big gold producers, LAC Minerals also hit the active list this week. Shares of LAC are currently being touted by Midland Walwyn of Toronto analyst Michael Jalonen, one of 20 analysts who visited the El Indio gold copper mine in Chile. Held 83% by LAC’s 65% owned subsidiary Bond International Gold, the mine is expected to produce roughly 220,000 oz. gold this year and 30,000 tons copper. However, as most of LAC’s future growth is likely to come from Bond, LAC’s offer to purchase the 35% interest it doesn’t already own is considered too low by Jalonen and other analysts who toured the mine.

Others are studying management changes at LAC and wondering what effect they will have on the company’s attempt to control costs.

This week’s US$5.80 increase in the price of gold was sparked by traders attempting to take a guess on what the U.S. inflation rate will be, according to McNeil Mantha of Toronto analyst Catherine Gignac.

Gold bugs are anticipating a big improvement in the gold price which has wallowed recently below US$360 per oz. “The big question now is when is that improvement going to happen,” Gignac told The Northern Miner.

However, gold stocks concluded a brief rally after the yellow metal closed at US$363.35 per oz. in London, down US$1 from the week’s high of US$364. The American Barrick, Echo Bay and LAC issues each gave up 13 cents. Placer Dome was even at $16.75.

Shares of Princeton Mining advanced 15 cents to US$2.45 while Freewest Resources dropped 5 cents to $3.40.

Meanwhile, the ailing zinc price edged up US4 cents to US59 cents per lb. as miners at Curragh Resources’ lead-zinc operation at Faro, Y.T., went on strike. At the company’s April 4 annual meeting, Chairman Clifford Frame said he was surprised that negotiators weren’t able to reach a settlement. “I feel sorry for the married people,” he said. “The young bucks can always take off.” However, union representatives say the strike could be lengthy and shares of Curragh gave up 25 cents today to close at $7.25, well below the high for the year of $10.63.

The Curragh workers have joined counterparts at Brunswick Mining & Smelting’s zinc mine and smelting complex in New Brunswick where miners have been on strike since last July. Despite intervention by New Brunswick Premier Frank McKenna, miners in New Brunswick were expected to say “no” to a new “final offer” when they voted April 11.

In other news, the board of Galactic Resources has authorized, subject to regulatory approval, a temporary reduction in the exercise price of warrants to purchase 7.2 million common shares.

The company said it plans to reduce the price to 95 cents until May 7. Galactic says the warrants carry various exercise prices, ranging from $3.90 a warrant to $9.87 a warrant.

Galactic Resources, which plans to merge with Cornucopia Resources has agreed to issue 0.7 of a Galactic share in exchange for each common share of Cornucopia — an increase from the original proposed share exchange ratio of 0.55 shares. Expected to be completed by the third quarter of this year, the merger is conditional on Galactic raising $9.1 million of which $4.5 million much be received by May 31.

Finally, Battle Mountain Gold is anticipating a first-quarter profit in the range of 4-6 cents per share. Shares of Granges Exploration hit a new 52-week low during the reporting period of $1.13.