Toronto Stock Exchange Free trade concerns keep index flat and

A much-expected Republican election victory combined with concerns of a Liberal government in Canada kept the market twitching nervously. After a couple of days of steep declines earlier in the week which clipped more than 100 pts off the index, a small rebound was met today by another decline. The composite gave up 15.99 pts to close at 3,262.24 pts.

Business and the investment community is deeply concerned about the incredible turnaround in the fortunes of the Liberal party which is turning the upcoming election into a referendum on free trade. If the Conservative’s get anything less than a majority, their deal with the U.S. stands a good chance of being scuttled by the opposition parties.

Gold continued steady at $420.80 (US) on the second London fix today. Despite the firm price, the index has seen better days, especially after four straight days of declines. That came to a halt today with a strong 71.67-pt advance to 5,841.54 pts.

Although mining companies are acting bullish with respect to gold investments, many others remain cautious about the metal’s prospects for the short-term. Concerns remain high over recession and deflation.

The metals and minerals index was easier, slipping 12.12 pts to 2,834.59 pts. The move reflected weakness in the base metals sector, which is responding to uncertainties over the resilience of copper, nickel and zinc prices. Noranda Inc. gave up a few cents to $21.88 on good volume. Cominco Ltd., which has been trading to new highs in recent weeks, was also softer, closing down 25 to $21.13.

Nickel miners Inco Ltd. and Falconbridge Ltd. were both marginally easier. Inco, which is trying to get a recapitalization plan approved, dropped 25 to $35.25. Falconbridge closed at $22.38.

Inco is wooing shareholder approval with a sweet $10 (US) dividend. A short- term play is seen here by investors who don’t feel the shares will drop by that amount after it goes ex-dividend. With nickel prices so firm, and looking strong for 1989, that kind of thinking looks very interesting.

Horsham Corp, the controlling shareholder of American Barrick Resources, and essentially a merchant banker, responded nicely with a $1.75 gain this week to $7.38. Today the issue slipped back to $7.13. The company, which was built by Peter Munk, Barrick’s creator, is making an offer to buy an oil refinery in the U.S. Munk bought gold mines in the early 1980s when bullion was out of vogue and now he’s doing it again — this time with oil.

American Barrick Resources was a tad better at $22. Placer Dome Gold was also stronger, closing at $16.50. The company is gearing up for a major boost in gold production from mines under development in Papua New Guinea next year.

Embattled LAC Minerals followed the trend, gaining 12 to $12.50. All eyes remain on the Supreme Court of Canada for a verdict on LAC’s appeal against a decision which awarded its Hemlo gold mine to Corona Corp. Corona’s A shares were also better at $9. The company’s newest gold mine will pour its first gold next week.

The Jolu mine is owned 30% by Corona and 70% by International Mahogany, a VSE-listed company. Jolu is expected to produce 50,000 oz of gold per year.

Diamond fever has gripped northern Saskatchewan, and the only way to play it is Claude Resources. The junior holds about 100,000 acres in the area, 35,000 of which are optioned to Corona. Claude moved up a nickel to $3.40.

Nuinsco Resources continued to rebound following a dismal conclusion in a prefeasibility study completed on its Cameron Lake gold deposit in Ontario. The issue closed at 85 .

New lows included United Keno Hill Mines. The Falconbridge- controlled money loser dipped to $6.25. United Keno operates several small silver mines in the Yukon.

McFinley Red Lake Mines also made the list, dipping to $1.15 before recovering today to $1.20.

Gold producer Eastmaque Gold Mines made a strong advance to $4.50 before closing at $4.40. For the week that represents a $1.40 gain. The company operates a tailings recovery project in Kirkland Lake, Ont. and an open pit gold mine in the southwest U.S.