Toronto Stock Exchange Choppy gold takes steam out of metal markets

Batten down the hatches. The last five trading days on the tse have been anything but smooth, as the gold and silver index continued to lose ground. At today’s close, the index gave up another 1.3% as it tumbled to 8,029.01 pts — well off its 1987 high of 9,799.17 pts.

Both the tse 300 composite and the metals and minerals index were both up 9 pts and 10.1 pts respectively. For the gold bugs however, the past week has been stormy indeed as most senior gold miners realized hefty price drops. Gold bullion, which was testing new highs just last week, fell to $448 (US) per oz today — a drop which sparked the gold share sell-off.

The recent dip in bullion price has been precipitated by a firming U.S. dollar and and easing U.S. interest rates. However, the renewed confidence in Uncle Sam’s buck could be a fleeting thing. Gold did show remarkable support above $440 and that appears to be a major resistence level. For the long term, almost all analysts are calling for much stronger prices. And that means the recent share price weakness could offer a juicy buying opportunity.

The bellweather gold stocks told the story. American Barrick Resources was off more than $10 on the week to $46.63. The company is going to become even more liquid after a stock split becomes effective this summer. Barrick is proposing a 2 for 1 split. Echo Bay Mines was also softer closing at $46.88; also off more than $10 for the week.

On the base metals front, Inco Ltd. continued steady at $23. Falconbridge was also quiet at $21.25. Scintilore Explorations soared to a new high of more than $7 during the week, before coming back to $4.35. The volume leader continued to trade at a racy clip, seeing 291,005 shares change hands today. The company is claiming all the benefits and royalties held by prospectors John Larche and Don McKinnon from the Hemlo gold discoveries originally staked by both men. At presstime, it appeared that both defendents in the suit had not filed statements of defense with the Ontario Supreme Court.

More takeover rumours. This one concerning Belmoral Mines. Street talk has it that Teck Corp. is going to take a run at the Quebec gold producer by soliciting a key block of shares from the Brown brothers in Calgary. Belmoral, which saw its shares active at $7.63, denies the speculation.

Just getting in under our deadline is confirmation that HSK Minerals and Joutel Resources have completed purchase of a 41.5% stake in Queenston Gold Mines. Both juniors paid the Canadian Imperial Bank of Commerce a total of $8 million for the control block. Joutel closed at 46 cents whereas HSK was active at $1.60. Queenston perked up at the close to end the day at $2.56. Watch for an emerging mining group to develop here.

Duration Mines broke some good news in the slow market. The company, which has been quietly working in the Casa Berardi area has come up with what appear to be the best gold results yet since the Estrades and Golden Pond discoveries were made. One of the best intersections was 2.5 oz gold per ton across 4.6 ft. The issue closed at $2.35.

SherrGold which is on the auction block, bounced back to $7.13 after flirting with the $6 mark. The name of Ned Goodman of International Corona comes up when a prospective purchaser is discussed. Look for some off-shore bidding for this Manitoba gold producer in the near future. .N16

** Urbana reaches exploration deal **

A mineral exploration agreement covering a northwestern Quebec gold property has been signed by Urbana Corp. and a Quebec-based exploration group.

The group will spend $750,000 during the next 12 months further developing Urbana’s Urban Twp. property, after which Urbana will own 50% of the property and its new partners the remaining 50%.

Under the agreement, Urbana will also receive $135,000, over a 26-month period, for exploration assistance.

For the 3-month period ending March 31, Urbana reported a loss of $5,726.