Toronto Stock Exchange Firm U.S. buck and high rates keep traders

High interst rates and a firming U.S. dollar continued to faze investors who tended to find more comfort in high yielding fixed income instruments. The strong U.S. dollar also gave gold bullion a beating, clipping more than $8 of the price of a one oz bar. The second London fix was $382.95.

The softening gold price was reflected in the gold and silver index which fell 41.18 pts to close at 5784.71 pts. Metals and minerals managed a small 3.9-pt gain to 3264.99 pts.

Gold issues taking it on the chin included Agnico-Eagle Mines which dipped to $12.13. Affiliate company Dumagami Mines realized a small gain to $11.88. Talk is that both companies are considering a merger.

Senior gold miners such as American Barrick Resources were also hurt in the sell-off. Barrick, which has completed a one-million oz gold loan, fell to $27. The company expects to be a million-oz gold producer by the 1990s.

Echo Bay Mines was also easier closing down 50 cents to $18. Echo Bay is anticipating a significant increase in gold production from mine expansion in Nevada and new projects coming on stream.

Hemlo Gold Mines, one of the lowest cost operators in North America, was marginally stronger at $14. Battle Mountain was unchanged at $18.50. The company is making a major $100-million investment in Nuigini Mining, an Australian company with an interest in the world’s largest undeveloped gold deposit on Lihir Island in the South Pacific.

Goldcorp was a tad better at $5.25 after sliding to a new low of $5. Some industry observers are saying if the gold fund succeeds in getting control of Dickenson Mines, it might as well rename itself Dickenson. Goldcorp will have to pledge almost its entire asset base to close the deal. The deal is also being contested by Corona Corp.

Traders also remained cautious of base metals issues despite the fact that the supply-demand fundamentals for most metals remain excellent for the balance of this year. Cominco Ltd. gave up 13 cents to $27 whereas Inco Ltd. was unchanged at $34.13.

Falconbridge Ltd. was firm at $28.88. Talk is continuing that Falconbridge and Noranda Inc. are discussing ways for Noranda to participate in Falconbridge’s world class Kidd Creek zinc-copper deposit near Timmins, Ont. Noranda is Falconbridge’s largest shareholder and has its eyes of increasing its stake. Noranda was firm at $22.88.

United Keno Hill, a Falconbridge affiliate, finally got the drubbing it deserved. The company has not made any money in years from several small high-cost silver mines in the Yukon. Yet for months it traded at unreasonably high prices. This week the issue lost $1.20 to close at $3.80.

Two companies with start-up projects which failed to deliver are Stan West Mining and Coxheath Gold. Stan West’s mine in Arizona shut down within months of opening, sending the stock into a tailspin. Today’s close was 58 cents . Coxheath operates the Tangier mine in Nova Scotia which has produced plenty of headaches, but unfortunately little gold. Tbe issue was unchanged at 40 cents .

Trader Resources advanced to a high of 68 cents before retreating back to 61 cents at the close. The company is drilling a promising gold find near Timmins, Ont. Initial results have identified a zone with true widths up to 100 ft and grading in excess of 0.12 oz gold per ton. Several higher grading sections have also been encountered. Pioneer Metals crashed to a new low. Once the darling of the so- called emerging producer set, the company has stumbled in its transition from mine finder to mine builder. The issue closed at $1.78.

A lawsuit filed by a group of upset shareholders against Augmitto Explorations claims that management defrauded the company. The action had little effect on the stock which, at 50 cents , was already near its low of 48 cents .

Metall Mining and Canamax Resources both made gains. The former was up 25 cents to $12.50 whereas the latter company added a nickel to $3.65. Canamax has also sold its 100% Mt. Hundere zinc deposit to Hillsborough Resources for $10 million.

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