Toronto Stock Exchange Index eases on jittery trading activity

Jittery traders ruled the floor of the TSE today, Jan. 17, as the composite index slid 27.71 points to close at 3,872.27 points. The nervousness stems from mounting concerns as to the direction of the economy, which is definitely slowing down.

According to the International Bank Credit Analyst’s January forecast issue, the environment for stock prices continues to grow risky. This is the result of contracting world liquidity. “The growth rate in the supply of international liquidity has fallen to a critical level below which declining stock prices and a contracting world economy would be typical,” BCA writes.

One of the major losers was the metals and minerals index, which gave up another 83.7 points to 3,137.04 points. Metals demand will likely ease if a full-fledged recession settles in — a scenario the market is aggressively discounting.

Gold, back in vogue after a 2-year bear period in 1988 and 1989, was firm at US$410.40 on the second London fix. With a solid base being built at the US$400-405 level, gold bullion, many predict, could average around US$440 this year.

Gold shares managed to generate some action today. The gold and silver index picked up 20.96 points to 7,940.51 points. Today’s volume leader was Corona, which witnessed more than 1.6 million of its A shares traded. The issue was easier at $10.75. Corona is following on the heels of LAC and American Barrick with a big unit offering designed to gross about $96 million.

LAC Minerals was the week’s volume leader. The issue was unchanged today at $15.25. Talk from Kirkland Lake, Ont., is that LAC has come up with a major gold find at its Macassa mine. One of the newly discovered vein systems is said to host up to 80,000 oz. of recoverable gold.

Other major gold mining companies were steady. American Barrick Resources closed at $20.75 whereas Echo Bay Mines eased slightly to $23.25. Franco- Neva da Mining, a big royalty holder on gold production in Nevada, was near its high, closing at $19.50.

Aur Resources slipped to $12.75 following news earlier in the week that Louvem Mining has applied for a court injunction ordering a cessation of exploration at the Louvicourt project. Louvem was also easier at $8 5/8. Parent company St. Genevieve Resources closed lower at $2.05.

Base metals issues were generally weaker. Inco dipped to another new low of $27.75. The issue keeps following nickel prices, which have tumbled to less than US$3.50 per lb.

One issue which is still quite strong is Pine Point Mines, a Cominco-controlled company. A large block of Pine Point stock has been offered to Teck and Cominco, the companies say. Pine Point is a zinc producer.

On the junior resource front, Queenston Mining has come to life in the past week, almost doubling in price to $1.85. The company holds varying interests in a large portfolio of properties in the Kirkland Lake camp. The Anoki gold deposit, controlled 65% by Inco and 35% by Queenston, will likely enter production this year.

Also, talk of a hot hole at Queenston’s Upper Beaver mine property has added spark to the issue. Pamorex Minerals has an option on the Beaver and is said to have hit more than 30 ft. grading in excess of 0.25 oz. gold per ton, sources say. Pamorex was firm at 56 cents after trading to a new high of 59 cents today.

Muscocho Explorations is not in the best of shape these days, having lost operating control of the Magnacon and Magino gold mines in Ontario. Those mines were the main source of income, via management fees, to the company. Echo Bay is the new boss on both sites. Muscocho closed at its low of $1.10. Windarra Minerals, which holds a 25% interest in Magnacon, was unchanged at 91 cents .

Thunderwood Resources, a company within the Jim Gill stable, was firm at $1.92. The stock has been a winner over the past few weeks. Two gold projects in Quebec are nearing the production stage.