Toronto Stock Exchange Gold’s advance fails to ignite enthusiasm

Gold’s resilient performance, which saw the price advance to $406.40 on the second London fix, failed to ignite much enthusiasm from war weary investors. The TSE composite index gave up 23.19 pts to close at 3,367.51 pts. Importantly, the volume of shares traded was 24.8 million — up markedly from levels just a couple of weeks ago.

The lack of investor interest in gold was reflected in the lethargic performance of the gold and silver index which lost ground, closing 8.7 pts lower at 5,907.33 pts. Metals and minerals was also a loser, slipping 33.9 pts to 2,855.1 pts.

The general disarray which still plagues the markets remains a legacy of Black Monday, the first anniversary which will be acknowledged respectfully by investors this week. The only ones who might truly celebrate October 19th are the small handful of bears who shorted their way to profit.

October 19th has also left its mark on the mining sector. Low capitalized juniors have been ravaged, their remains being examined and picked by cash-rich vultures. In fact, the entire structure of the industry is changed. Witness the spate of takeovers and equity investments completed by majors in juniors. That trend is likely to continue for some time.

One deal which appears to be faltering is the merger between Wharf Resources and Dickenson Mines. Wharf, a low cost gold producer in the U.S., advanced 25 to $5.25. For the week, that closing price is a up a full dollar.

Lac Minerals slipped 25 to $12. The drop comes on news that the company’s arguments, to get a retrial of its case with Corona Corp. over the Page-Williams mine at Hemlo, were rejected by an Ontario court. Corona’s A shares advanced to $9.75.

Management at Lac are circling the wagons, and like Custer, are making their last stand. This week Lac lawyers launched their final appeal before the Supreme Court of Canada in an effort to win the mine back.

American Barrick Resource firmed up to $22. Placer Dome Inc. was marginally weaker at $16.13. Last month we mentioned that Barrick is a possible buyer of Newmont Mining, control of which will be sold by Minorco if it succeeds in taking over Consolidated Goldfields. Newmont, which stands to become the largest gold miner in the world, outside of South Africa, is the gold mining takeover of the decade.

Placer, which has more than $1 billion in cash, is a potential Goldfields white knight, according to a Toronto mining analyst.

Echo Bay Mines was easier at $20.25 whereas Agnico-Eagle Mines continued to firm, closing at $14.13.

Cassiar Mining, which is making bundles of money from its recently purchased Similkameen copper mine in British Columbia, continued to improve, closing at $4.40; up 25 for the week.

Opposition is growing towards the proposed recapitalization plans made by Inco Ltd. A poison pill and a rich $10(US) dividend must be approved by shareholders shortly. That meeting is expected to be heated. Several large institutional shareholders are against the deal.

The issue dipped to $36.13 from $36.25 today. Falconbridge Inc., which is being taken over by Noranda Inc., declined 25 to $21.75 in good volume of 286,470 shares.

Hope Brook Gold has officially commissioned its mill at its gold mine in Newfoundland. The issue, which is controlled by BP Canada, was up a dime at $4.30. Granduc Mines, which is controlled by Hecla, was also better, advancing 10 to $4.10. Granduc has a 40% interest in the high grade Sulphurets gold deposits in B.C.

Golden Shield Resources continued to fall into new low territory, closing at 46 . Scintilore Explorations, which is trying to get into the Hemlo area via the courts, slipped a dime to $2.65. The company is suing the prospectors who staked the original Corona claims.