Toronto Stock Exchange Little cheer on anniversary of Black Monday

Investors found little to celebrate today — the first anniversary of Black Monday. Although those wild and tumultuous days of mid- October are behind us, the uncertainty and damage wreaked by the market collapse on Wall Street remains with us.

The TSE composite index recorded a marginal 5.12-pt decline to 3,380.03 pts on volume of 22.9 million shares. Despite a firming gold price, investors continued dumping gold issues, a move reflected in the gold and silver index which slipped 7.53 pts to close at 5,835.76 pts. For the week, the gold index is off 1.2% or 71.57 pts.

Gold, which found good support around $395, has bounced back well over the important $400 (US) mark. Today’s second London fix was $411.25. According to James Capel & Co., a London-based investment house with solid interests in mine financing, the gold market remains weak and could get worse. The move below $435 broke the 1985- 1988 gold bull support line. “Most recently $425 was half the high of $850 (reached in January, 1980) and was also last February’s low. Each time the hoped for support halted the slide, but not for long,” Robert Weinberg, precious metals analyst with James Capel writes. He concludes that the outlook for gold is alarming.

This analysis comes as no surprise to investors who have seen the gold and silver index give up more than 23% of its value from a 1988 high of 7,594 pts.

Corona Corp. A shares were steady at $9.13. The company is eagerly awaiting the judgement of the Supreme Court of Canada following an appeal by Lac Mineral s over ownership of the rich Page-Williams mine. Lac, which is hoping to salvage something from its nightmare, was stronger at $11.75.

Weaker issues included American Barrick Resources which slipped to $21.38. Pioneer Metals, which was once the darling of the emerging producer set, hit a new low of $3.10 before recovering to $3.15. The issue has a 52-week high of $16.50. Despite the price decline, Pioneer is a producer and has assembled an excellent portfolio of gold projects. That makes this issue a juicy takeover target. Placer Dome Gold was active at $16.25 as was Noranda Inc., which closed at $22.75, up 50 for the day. Echo Bay Mines flirted with its 52-week low of $19.37, before closing at $19.88.

Looking for some happier news, Cassiar Mining reached another new high, closing at $4.80. The company is making lots of money from its Similkameen copper mine in British Columbia which was purchased earlier in the year from Newmont. Combined with earnings from its asbestos operations and a strong balance sheet, Cassiar’s value is finally being recognized by the market. We first noted the issue at $3.95 in our August 29 issue after the issue made a $1 gain from $2.95.

Cash-rich Northgate Exploration is dipping into its pockets again. The company is taking down an $8 million private placement in Neptune Resources. Northgate was easier at $7.63 whereas Neptune gave up a penny to $2.99. Neptune is building a 200,000-oz-per-year gold mine in the Arctic with a price tag in excess of $120 million.

Inco Ltd. gave up some ground, closing at $36 on good volume of 335,000 shares valued at $12 million. Opposition towards the company’s plan to implement a poison pill and issue a $1 billion (US) special dividend is growing. The Mineral Resource Analysts Group, for the first time in its 19-year history, has passed a resolution opposing the linking of shareholders rights plans to the payment of a special dividend. Although not mentioning Inco, the resolution is aimed squarely at that company’s plans.

Falconbridge Ltd. was steady at $22.63. Teck Corp. A shares declined to $16.38, off 37 for the day. Skyline Explorations, which is the first company in the rugged Iskut River area of B.C., to place its property into production, moved up to $9.25.

Lynngold was also better, advancing to $2.70 after dipping to $2.20 earlier in the month. Lynngold operates the MacLellan gold mine near Lynn Lake, Man.