Toronto Stock Exchange Casa Berardi discovery sparks buying as

Those who predict that a weaker U.S. dollar and trouble in South Africa will eventually force the price of gold through the US$425 per oz. barrier on up to US$450 were having to swallow their words this week. On Feb. 14, today, the yellow metal closed at $414.60 on the second London fix, down from US$423.75 a week ago. The gold index fell for the third day in succession to 7787.53.

While Merrill Lynch analyst Catherine Gignac called the price drop a correction on the fast increase that followed Nelson Mandella’s release from prison in South Africa, a couple of prominent gold issues lost ground. American Barrick Resources and Corona both dropped 13 cents to end the day at $22.50 and $10.50 respectively.

Speaking of gold, the big news for the week ended Feb. 13 was the 59-ft. intersection reported in the Casa Berardi, Que., claims held by Inco, Cambior and Societe Exploration Miniere Vior.

Assaying at 0.23 oz. gold per ton and located in Douay Twp., it sparked a buying spree, which made Joutel Resources one of the week’s most active issues. Almost five million Joutel shares changed hands this week as the issue climbed to 42 cents from 39 cents .

Joutel holds a block of claims seven miles northwest of Douay Twp., on the boundary of another Vior property. Rumor has it that Inco is negotiating a deal with Joutel after apologizing for an earlier offer. Inco Gold and partner Golden Knight Resources are intimately familiar with the geology of the Casa Berardi region where some interesting developments have occurred around their jointly held East and new West mines.

Those developments include a significant reserve increase at the West mine property and some encouraging surface drill results north of the East mine. As a result, Inco closed up 12 cents at $27.25 while Golden Knight remained steady at $12.

Beaufield Resources and Golden Rule Resources are two of the other claim holders in the area. That explains why both issues were active this week. More than 1.5 million Beaufield shares crossed the floor as the issue popped up to 45 cents from 30 cents . Golden Rule was stronger at $1.87 after starting the day at $1.69.

Ironically, Queenston Mining and Dominion Explorers were quiet even through both companies have a sizable interest in Joutel. The product of a recent amalgamation involving Queenston Gold Mines and HSK Minerals, Queenston lost 5 cents . Dominion, meanwhile, equalled its low of 7 cents after falling from 10 cents .

As resource companies continue to hatch their 1989 earnings, Noranda Chairman Alfred Powis says he is forecasting lower earnings for 1990, compared with 1989, and Noranda, therefore, will trim its mining and exploration budget. While the company’s zinc and copper output is expected to increase, there could be nickel production cutbacks at the Sudbury operations of 50% owned Falconbridge Ltd., Powis said. The big company added 38 cents to its share price closing at $21.38.

On the subject of base metal exploration, it is now 14 weeks since Aur Resources and partner Societe Miniere Louvem released any results from their Louvicourt Twp. discovery east of Val d’Or, Que.

The time it is taking operator Aur to assay its drill core prompted one concerned shareholder to remark that he would have fired himself if he was acting as the driller. Without any news to bolster its share price, Louvem has slipped back to $7.63 from $10 while Aur is trading at $12.38.

Denison Mines reported a 1989 loss of $3.4 million, compared with a profit of $4.7 million last year. After provision for preferred share dividends, the loss per participating share was 46 cents in 1989, compared with a loss of $2.25 in 1988. Chairman Helen Roman-Barber attributed the loss to weakened potash markets and reduced production volumes in both the mining and oil and gas divisions.

Closing at $3.05, Denison shares moved nearer to their yearly low of $2.90.

By contrast, even though Euro- Nevada’s recent third-quarter profit was down slightly to $278,000 from $317,000 the previous year, the issue has been a strong performer lately. After reaching a high of $14.25 this week it settled at $12.75.

Sister company Franco-Nevada, which holds a royalty interest in American Barrick Resources’ Goldstrike mine in Nevada, reported a 40% increase in its 9-month profits. Franco shares remained steady at $21.25 this week.