Toronto Stock Exchange Easing bullion prices snap rally in golds

The strong movement in gold issues was the highlight on the TSE, which remained essentially unchanged during the week. Today’s composite gained 13.77 points to close at 3937.02 points. Volume was above average at 32.8 million shares.

Although gold bullion has made a nice gain of about 6%, gold equities, as measured by the gold and silver index, have soared by almost 10%. That rapid jump, combined with an easing in bullion prices today, sparked the sell-off in golds.

On the base metals front, the metals and minerals index advanced by 19.77 points to close at 3421.59 points. For the week, however, the index was off by about 25 points. Volatile copper prices, combined with a general perception that the economy will slow, thereby weakening demand for most metals, has put pressure on many senior base metals mining companies.

Winning issues were mainly senior, highly capitalized golds. These include American Barrick Resources, which moved to a new high of $35.75 before settling back at $35.50. Talk continues to circulate that a new discovery on a property north of the Goldstrike mine in Nevada could host several million ounces of gold.

Echo Bay Mines was also active, trading to $20.75. Placer Dome was a volume leader, trading more than 1.4 million shares on Nov 8 to close at $21.38, down from $21.75.

All three issues involved with the Louvicourt copper-zinc find in Quebec were firm at the close today. Aur Resources topped out at $13.75 in a brief trade earlier in the week before slipping back to $13 today. Louvem was also strong at $8.38 whereas parent St. Genevieve Resources was also better at $2.18.

Results released after the close have added millions of tons to the reserves. The zone is wider and better than ever at depth and is wide open (see front page story).

LAC Minerals denied that the company had made a gold find near Hemlo. Talk from northern sources was that a new discovery had been made near White River, Ont. LAC has acquired more ground but is not reporting a find. The issue was also a leader this week, trading up to $14 before slipping back to $13.50 during today’s sell-off.

Franco-Nevada Mining and Euro- Nevada Mining were both in new high territory. Franco has royalties on Barrick’s Goldstrike mine whereas Euro holds royalties on the North claim property on which Barrick is said to have made another major discovery. Franco was firm at $15.25 — a new high — while Euro-Nevada closed at $7.50.

Mid-sized gold miner Golden Knight Resources was also easier at $10.63. The company, in partnership with Inco Gold, plans to build a second mine at their Casa Berardi project in Quebec.

Base metals issues were generally better today. Cominco Ltd. added 50 cents to $27.75. Metall Mining gave up 13 cents to $13. Metall owns the big Copper Range copper mine near White Pines, Mich. Although copper prices have retreated from their 1989 highs, prices are still high enough to provide Copper Range with healthy profits, Metall says. Inco Ltd. was also better at $34.88. The issue, however, is still way off its 1989 high of $44.25.

Junior issues remained quiet. Most analysts agree that it will take a sustained gold rally before investor interest begins to filter down to the juniors. Two that had some spark are Pronto Explorations and Windarra Minerals. Pronto holds a 12.5% interest in the Cochenour- Willans project operated by Inco Gold. Encouraging results helped the issue to 53 cents before it slipped back to 51 cents .

News that Cameco plans a feasibility study for the Bakos deposit in Saskatchewan helped Windarra to 98 cents . Windarra has a 20% interest in the project which could be a 70,000-oz-per-year producer in a couple of years.

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