Toronto Stock Exchange Inco, Franco-Nevada peak amid listless

The first initial public offering by a junior mining company to be cleared by The Toronto Stock Exchange so far this year was revealed to the public during the week ended July 9. Shares of Wheaton River Minerals will commence trading this week, signalling perhaps that at last the worst may be over for Canada’s beleaguered junior mining sector.

The Wheaton River shares are coming to market at a time when trading activity has been extremely listless. With gold still locked in the US$360-370-an-oz. range and demand for base metals low, analysts expect share prices to remain within the same narrow range for the next few months. Following up on a week of light to moderate trading activity, the composite 300 index closed today, July 10, up 6.78 points on a volume of 17.8 million shares. The value of shares traded today was $234.4 million.

However, there was good news in store for shareholders of Franco-Nevada Mining, the Toronto company that holds a 4% net smelter return and 5% net profits interest in American Barrick Resources’ Goldstrike mine. Riding on the promise of future benefits of a possible merger involving Barrick and Newmont Mining, Franco-Nevada shot to a new high of $22.25.

Chairman Seymour Schulich has been talking with institutions in Zurich and Geneva this week as part of a European tour designed to alert investors to what he sees as a bright future for Franco-Nevada and sister company Euro-Nevada Mining. At $27.13 today, Barrick is fast approaching its $28.25 high point.

Shares of Inco roared ahead to a new high of $42.75 amid reports by Richardson Greenshields of Toronto that nickel, at this week’s US$4.04 per lb. spot price, is sensitive to disruptions on the supply side, even if demand were to weaken. In addition to Inco, Richardson analyst Raymond Goldie is recommending shares of Timmins Nickel which advanced today by one cent to $1.10.

With demand for zinc expected to remain slow for the foreseeable future, Noranda and 64.7% owned Brunswick Mining & Smelting are looking for a third partner to help finance the expansion of their Heath Steele zinc-lead operation in New Brunswick. Noranda gave up 38 cents today while Brunswick was even at $7.38.

Directors of both LAC Minerals and 64.7% owned Bond International Gold agreed this week to sweeten LAC’s offer for the 20.4 million Bond shares it doesn’t already own. Under the new offer, LAC will exchange 0.71 of its own shares for each share of Bond compared with 0.53 under an earlier proposal that was heavily opposed by institutions. LAC was unchanged today at $10.

Active stocks this week included Echo Bay Mines which closed down 25 cents. Atlanta Gold gave up 20 cents to end the week at $1.50. Two months ago Atlanta Gold was trading at $2.85 thanks to investor interest in Atlanta’s gold joint venture with Newmont in Elmore, Idaho.

As investors waited for more news on Audrey Resources’ bid to sell its interest in the Mobrun polymetallic mine near Rouyn-Noranda, Que., shares of Audrey slipped to a new low of $2.40 where they remained today.

At the second attempt, promoter Richard Nemis succeeded this week in obtaining financing for exploration on Wisconsin properties held by Wiscan Resources and joint venture partner Noranda. According to Wiscan, Loewen, Ondaatje, McCutcheon & Co. is underwriting a $750,000 financing package consisting of 2.5 million units priced at 30 cents each.