Toronto Stock Exchange Golden Knight’s aparkle, exception to dull

What little market enthusiasm developed over news from the United States that the red hot economy appears to be cooling, generated almost no response from the metals sectors. In fact, any sign that inflation fears are overblown is dismal news for gold bugs.

Some buying was sparked by a leading economic indicator which showed the number of U.S. jobless to have increased. However, it was hardly enough to bring the herd back to the buying trough. Today’s performance was a mirror of last week’s, characterized by weak volumes and stagnant trading. A 1.95-pt drop moved the TSE composite to 3,297.89 pts. Metals and minerals were also easier, dipping 23.31 pts to 2,863.39 pts. Gold remained in the doldrums, burdened by higher interest rates and the real prospects of even higher rates for the short term. Most analysts however, are looking to gold for major gains over the long term; possibly back to the $500(US) per oz range.

Major gold miners were generally lacklustre. Placer Dome Inc. slipped to $15.50. Lac Minerals, which is still contesting ownership of the Page-Williams mine, gave up a quarter to $13.25.

Echo Bay Mines, which is being given the `thumbs down’ by several analysts due to problems at its newest mine, the Cove, bucked the downtrend by closing at $21. However, that’s only a snicker above the issue’s 52-week low of $20.75.

Problem-plagued Agnico Eagle Mines continued giving up ground by diving a buck to $14.50 during the week. The company reported its first quarterly loss since 1977 last week.

Nickel miners were hurt by a 50 cents drop in prices to $6(US) per lb. Inco Ltd., the worlds largest miner of the metal, gave up 25 cents to $35.75. Falconbridge Ltd., which is now controlled by Noranda Inc., was also easier, closing at $21.38. Despite the drop in nickel prices, which was more than overdue, anything over $3(US) will continue to make both companies handsome profits.

Profits, unfortunately, appear to be eluding Pacific Trans-Ocean, which took a walloping today. The company, which holds a 50% interest in the Ketza River gold mine in British Columbia, plummeted by $1.30 to $1.50. The low trade for the day was $1.35. That’s a 46% loss in one day. Start-up problems at the Ketza mine have produced less gold than was expected. Also, the company’s share of a $6 million overun in mine costs must be paid — cash which Pacific just doesn’t have. As a result, the junior is scrambling for a quick infusion of money. Canamax Resources, the project operator, remained firm at $7.

Today’s excitement came from — what else? — a drill hole. That perennial exploration favorite, Golden Knight Resources responded to news that Inco Gold had drilled a spectacular 83 ft grading in excess of 0.8 oz gold per ton from their Casa Berardi area Golden Pond mine property. Knight traded more than 500,000 shares and moved a dollar to $11.13. The property not only has exploration appeal, its also entering production this month.

Golden Knight was an exception however. The bear market continues to maul the small capitalized juniors; another pack of which entered new low territory.

Duration Mines slipped to 20 cents . That’s quite a slide from its high of $2.40. Again, financial problems are the main cause. International Platinum joined the group with a close of 1.07, after dipping to 97 cents . Giant Yellowknife was also easier, slipping to $13.50 — down 75 cents .

NovaGold remained weak at $101.24. The company was hurt last week by an incorrectly reported story in a daily newspaper that the TSE was investigating insider trading activity.

Claude Resources was steady at $3.75. Newmont has begun drilling the company’s Ithingo Lake gold property in Saskatchewan. The company is also down to a short list concerning prospective partners for its Seabee gold deposit.

Consolidated Professor, which closed at 96 cents , is also looking at financing options for its Duport gold deposit near Kenora, Ont.