Toronto Stock Exchange Golds and metals provide boost to index

A much-needed 21-pt boost helped move the composite index to a close of 3,294.68 pts. That represents a 48-pt gain during our review week. Today’s gains came on the backs of golds and metals which each posted healthy advances.

The gold index responded to a modest rise in the price of gold bullion, which was quoted at $422.60 on the second London fix. Surprisingly, both New York and Toronto continued to display resilience in the face of upwardly creeping interest rates.

Buying in golds added 44.64 pts to the index which closed at 5,650.50 — up 117 pts for the week. For investors holding gold equity, the buying provided some short-term relief from the tight grip of a powerful bear market. The question is, how long will any upward momentum last?

Metals and minerals continued firm, adding 17.88 pts to 2,925.38 pts. Copper, zinc, nickel and aluminum continue to show remarkable support at current prices — support which suggests the boom is far from over. According to Bank of Nova Scotia economist Patricia Mohr, commodity prices will remain firm through to year-end. Copper is also expected to be a star performer in 1989.

Gibraltar Mines, which operates an open pit copper mine in British Columbia, was active, trading to $11.50. The company is controlled by Placer Dome Inc. Cominco Ltd was also a busy issue, adding a few cents to $22.25. Another issue which is enjoying the benefits of record zinc prices is Mineral Resources International. The issue continued to struggle at $4.25, generally unable to bust out of the $4-$4.50 range. MRI operates the Nanisivik zinc-lead mine in the Arctic.

Copper has even attracted the keen eyes of the Franco-Nevada people. Better known for their lucrative royalty on the Goldstrike gold deposit near Carlin, Nevada, Franco has purchased control of sleeply junior Redstone Resources. Redstone hopped to a new high of 50 on volume of 186,500 shares today.

Redstone’s main asset is the Coates copper deposit in the Yukon. A drill-indicated reserve of 37 million tons is hosted in a very narrow 3.3-ft zone dipping into a mountain. Grades are 3.9% copper per ton. Franco closed lower at $7.13.

One of the largest winners this week was Inco Ltd. The issue added more than $2 over the week to close at $38. Combine a robust nickel market with a rich $10(US) per share special dividend, and it comes as no surpise why many felt Inco was undervalued at $35 several weeks ago. Talk on the street is that the special shareholders meeting set for Dec 9th, will result in a close vote in favor of a controversial restructuring plan. Falconbridge Ltd. was also steady, closing at $22.63. The company has filed a final prospectus in connection with a dividend of 49% of the issued shares of Falconbridge Gold.

Placer Dome Inc. made an advance to $16.50 from $16.13. American Barrick Resources lost some ground, closing at $20.38. LAC Minerals was also easier, dipping to $12.25. LAC has lost several key people in recent months. The latest is Robert Valliant, vice president of exploration, who had replaced Dennis Sheehan.

Corona Corp. released year-end results which showed earnings of 12 per share. Adding in the contested Williams mine at Hemlo, and earnings climb to 29 per share. The A shares were 25 better at $8.25. Corona’s B shares were also firm at $8.75.

Cash-rich Cambior Inc. is bidding $1.50 per share for up to 60% of Nova-Cogesco. Nova holds varying interests in several promising gold plays in Quebec. The best is a 20% stake in the big Silidor gold deposit. Look for a good fight here as Nova’s officers have already rejected the bid. Cambior was stronger at $13.38 whereas Nova climbed to $1.55 — up 43 for the week.

Windarra Minerals dipped to a new low of $1.17 before moving back to $1.20 today. Agnico-Eagle Mines is also trying to stay above its 1988 low, with a close of $12.88. The year low is $12.50. Problems at the company’s only gold mine in Quebec have hurt the company’s bottom line.

Duration Mines shareholders can assume the worst is over. The company, which lost its 100%-owned Theresa gold property due to an account problem with its contractor, has regained title. The issue remained soft at 15 .