Toronto Stock Exchange LAC share volumes soar on takeover talk

Talk of a takeover by cash-rich Minorco (see front page story) triggered the flurry of buy and sell orders. Minorco officials neither confirmed nor denied the speculation when contacted by The Northern Miner. Sources say that Minorco, with liquid assets of more than $2.5 billion, could swallow LAC whole without seeking bank support.

The money chasing LAC is serious stuff, which enabled the issue to buck the general downtrend in the gold sector. During LAC’s upward run from the 27th to the 29th, the gold and silver index declined, slipping 1.13 points today to 7472.34 points. London’s afternoon bullion fix was firm at $410.10(US).

Overall activity on Toronto saw a 19.86-point gain in the composite index to 3946.65 points. Metals and minerals also rebounded with a healthy 15.56-point gain to 3362.41 points.

Although profit-taking has stopped the gold rally on several sessions during the past two weeks, the new gold price of $410 appears to be holding. Many analysts, bears just a month ago, are now bullish with forecasts of $420-450 over the next 12 months.

Placer Dome was strong at $21.88. With more than $800 million in cash, the company has been cautious about making hasty investments. If LAC is being put into play by Minorco, Placer might be a possible white knight.

American Barrick Resources eased to $37.13 as did Echo Bay Mines which dipped to $21.38. Corona Corp.’s A shares remained unchanged today at $10.63.

Officials of Euro-Nevada Mining believe a new gold find on Barrick’s North property near the Goldstrike mine in Nevada hosts gold reserves of more than four million ounces. The find sent Euro-Nevada, which holds lucrative royalties on the ground, to a new high of $9.75 on Nov 28 before settling lower at $9.25 today. The issue was trading around $4.30 in mid-October .

Pierre Gauthier, chairman of St. Genevieve Resources and affiliate company Louvem, told a crowded room of analysts in Toronto that the company has evidence that Aur Resources withheld valuable exploration information from the big Louvicourt copper discovery from Louvem. Both companies are locked in lawsuits.

Last week’s news in The Northern Miner that Noranda Inc. will try to stop underground development at Louvicourt until the lawsuits are resolved sent Aur into a tailspin to $12.13 at one point earlier in the week. Today’s close saw the issue recover to $13. Louvem was also better at $9.75. Despite the immense size of the find, the lawsuit appears to be taking centre stage over exploration results. Noranda controls Louvem and St. Genevieve.

Nickel issues took it on the chin today. Inco Ltd. continued to slide, losing 50 cents to close at $32.63. Junior nickel plays such as Timmins Nickel and Black Hawk Mining were also in disfavour with investors.

Timmins Nickel fell to a new low of $1.31 before recovering to close at $1.35. The issue came out last summer at $1.75. Black Hawk, which is exploring the Minago nickel deposit in Manitoba, tumbled to $1.09. Nickel plays are losing their shine on fears that a recession will depress nickel demand in the near future.

Base metals issues such as Cominco Ltd. and affiliate Pine Point Mines were firm at $26.75 and $41 respectively. Both are major zinc producers. Pine Point has cash of $135 million and no debt.

Redstone Resources continues to reach new highs. This week, Gordon Capital placed 800,000 shares at $1.70 to top up Redstone’s treasury to $2 million. The issue closed at $1.79. Management is the same as that at Euro-Nevada, which has a wide European, Canadian and U.S. following. Redstone chairman Pierre Lassonde says that several potential acquisitions are being reviewed.

Jascan Resources was also active, popping up to 68 cents . The company is also looking for good cash flow deals and has more than $7 million in the till to back the right project. Faraday Resources increased its stake in Jascan to 48.8% this week.

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