Toronto Stock Exchange Franco-Nevada big winner on otherwise quiet

Franco-Nevada Mining, Placer Dome and Corona A were among the issues which benefited from an increase in the price of gold bullion for the week ended July 3. Analysts attributed the advance to US$362.50 per oz. from last week’s US$350.30 to the threat of strikes in South Africa and the Soviet Union. They believe trade buyers have been bolstering their supplies to offset any shortages that would result from any shutdowns.

But according to Rick Cohen, a precious metals analyst with BBN James Capel Inc. in Toronto, gold will continue to hover between US$350 and US$360 per oz. until some of South Africa’s antiquated gold mines are shut down. “We are shaking the tree at the moment but the leaves haven’t started to fall,” said Cohen, in reference to this week’s rally.

A strike at the Brunswick Mining and Smelting lead-zinc operation in New Brunswick is expected to have repercussions for the price of zinc if it proves lengthy and employees at Cominco take similar steps. Brunswick’s controlling shareholder Noranda gained 25 cents to close at $20.50 while Cominco moved up 37 cents to $26.25.

However, on a day when share volumes reached only 10.9 million shares and the composite index gained 15.34 points to close at 3575.24, Franco-Nevada was the big winner. Shares of the royalty specialist jumped by $1.37 to close at $20. Among the major producers, LAC and Placer Dome both gained 13 cents while Corona remained steady at $7.63.

Ironically, activity on the gold market coincides with some new developments in the Eskay Creek saga which is now assuming soap opera proportions. Last week, Vancouver promoter Murray Pezim appeared to be holding all the trump cards as he threatened to block the merger of Stikine Resources and Prime Resources, each owns 50% of the Eskay gold property in British Columbia.

This week, the advantage swung toward Corona Chairman Ned Goodman, after he emerged from discussions with Vancouver businessman Jim Pattison with a approximately 27% of Prime and first refusal on 45% of the company.

A separate offer to insiders of Stikine would guarantee them a minimum $70 per share for their holdings. Corona has locked up 45% of Stikine which closed down $2 today at $70.

As Placer Dome already holds 45% of Stikine, Cohen says the next stage in this drama would be negotiations involving the two big gold producers.

A key player in the fight between Placer Dome and Corona for control of the project could be Euro- Nevada Mining (Franco-Nevada’s sister company) which holds a 6% stake in Stikine. But it will only be a factor if Placer Dome and Corona fight over Stikine. Euro-Nevada was down 63 cents, closing at $14.50.

Meanwhile, Canamax Resources is revising its 1990 gold production targets after opting to shut down the Ketza River mine in British Columbia and Kremzar mine near Wawa, Ont. Canamax, which gained 5 cents to close at $1.25, had expected to produce 100,000 oz. this year.

Attention also returned this week to the Louvicourt Twp. massive sulphide project as partners Aur Resources and Societe Miniere Louvem confirmed for the first time that they are involved in discussions geared to solving their dispute.

Neither side will say what exactly is being discussed. But sources close to both companies say Louvem Chairman Pierre Gauthier is seeking a bidder for a block of Louvem shares held by St. Genevieve. However, as Noranda has the right of first refusal on those shares it would have to be consulted before any agreement is signed. More than 220,264 St. Genevieve shares changed hands today as the issue closed down 1 cents at $1.52. Louvem dropped 12 cents before ending the day at $6.13 while Aur stayed steady at $4.40.

Trading of Trimin Resources shares resumed after the company announced that it has received an offer from Billiton Resources Canada to purchase Trimin’s 32.9% stake in the Hanson Lake zinc property in Saskatchewan. Trimin was even at $3.

Reaching new lows this week were Canhorn Mining, Continental Gold, Goldpost Resources, Mentor Exploration, Stewart Lake Resources and Wharf Resources.