Toronto Stock Exchange Low rate outlooksparks market to new high

Gold bullion, which also benefits from lower interest rates, remained stable at $366(US) per oz on the second London fix. However senior gold equities, ignoring the fact that bullion was unchanged, moved the gold and silver index up by 34.59 points to 6337.59 points — up 0.55% in a day. Volume was 35 million shares.

With the second anniversary of Black Friday fast approaching, all signs of the destruction wrought on that dismal day have long disappeared. The markets are robust and healthy with many betting that things are going to get even better.

About the only sector which still suffers from the after effects of the crash of ’87 are the junior golds. Most remain near their lows and have little hope of recovering for some time. Many companies that saw the demise of their projects never will.

Senior gold, however, are still followed by institutional investors. That group includes American Barrick Resources which added a dollar to $29.75. Placer Dome advanced to $19 on more than 300,000 shares. Echo Bay Mines was unchanged at $18.50.

Juniors with base metals are faring quite well. Witness Aur Resources which transformed itself from a gold play into a copper play after announcing last June its exciting Louvicourt copper-zinc discovery in Quebec.

The stock began to heat up again this week following reports by several mining analysts that the deposit could host at least 40 million tons of ore. Valuations of Aur’s shares range from $19 to almost $40 per share (See front page story). After trading quietly in the $9.50 range following the Sept 20 results from holes 58 and 66, the issue ignited again this week to close at $11.63 on volume of more than 400,000 shares.

Louvem Mining, which has a 50% interest in the property and is suing Aur over ownership, was also firm at $7.75. St. Genevieve Resources, which controls Louvem, also managed to advance closing at $2.37.

Senior base metals issues were generally weaker. The metals and minerals index slipped by 22.99 points to 3774.76 points. Inco Ltd., which is still enjoying the fruits of an extremely healthy nickel market, eased to $40.88 from $41.13. The high this year is $44.25. Minnova held on to gains made earlier in the week to close at $20.63. The company produces copper, zinc, gold and silver from several mines in Ontario and Quebec.

Cominco Ltd. was also active, trading at $30.13. The stock continues to trade near its high of $32.13 as a result of the strength in the zinc market. The company expects to ship its first zinc concentrate from its big Red Dog mine in Alaska next year.

Unconfirmed rumors continue of a special dividend of $1 per share from LAC Minerals. The issue was off 24 cents at $11.25. Galactic Resources is managing to stay in the $3.40 range. As most mid-sized gold miners, the company is suffering from low gold prices and the legacy of broken promises on projects which failed to deliver. The company’s Ridgeway gold mine in South Carolina appears to be a winner which could turn the tide for Galactic.

Timmins Nickel firmed to $1.96. The shares were first issued to the public at $1.75 last month. Timmins owns a 51% interest in the Redstone nickel mine which is expected to produce five million lb of nickel during its first year. Although operating costs are relatively high, the richness of the ore (2.9% nickel) ensures profitability.

Cusac Industries got a much needed boost from its partner Total Energold. The latter company has made several impressive gold finds on their joint venture B.C. property which could lead to reopening of Total’s Erickson mill in the area. Cusac was firm at $1.35.

Canamax Resources says there is no reason behind the jump in the price of its stock which shot up to $3.35 today. Last week the issue was trading at $2.40. The company operates three gold mines.

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