Toronto Stock Exchange Metal stocks advance as Hemlo mulls Noranda

Resource giant Noranda was conspicuous during the week ended March 12 as it moved to pare down a potentially crippling $3.9-billion debt load. Confirming speculation that emerged on Toronto’s Bay Street last year, the big company said it has offered to deal its gold assets, including interests in the Silidor mine and three advanced exploration projects, to 50.8%-owned Hemlo Gold.

The fact that such a move could allow Noranda to realize the real value of its gold assets and add much needed growth potential to Hemlo Gold, however, had little effect on the share prices of either company. Today, March 13, Hemlo was even at $9.25, while Norandagained 13 cents to close at $18.38.

But the impact on Freewest Resources could be much greater if results from 12 holes at the Holloway, Ont., gold project live upto expectations. With four drills still turning at the property, reserves are rumored to be more than six million tons grading 0.25 oz.

Those in the know say Holloway will eventually find itself in the portfolio of Hemlo Gold where tax breaks on future exploration expenses would be substantial. Freewest closed down 10 cents today at $3.80.

Madeleine Mines has hired some high-priced legal help in its bid to fight charges launched against it and President Patrick Sheridan by the Ontario Environment Ministry.

Criminal lawyer Edward Greenspan says he anticipates a lengthy trial when court proceedings get under way. Madeleine shares stayed unchanged at $5.

Meanwhile, the recession, which has driven the Canadian unemployment rate above 10% for the first time in five years, is also having a big effect on the price of zinc. As the metal hit US54 cents per lb. this week, down from a 52-week high of US$ 84 cents, Falconbridge said it would cut its Kidd Creek, Ont., zinc output by 16%, or 22,000 tons, this year. The nickel miner plans to offset the reduction by upping its copper output. This news didn’t deter shareholders of VSM Exploration. Today the shares were stalled at $1.30.

But earnings of Breakwater Resources have been hit hard by the sagging zinc price. Annual losses of $1.17 per share included a $64.1-million writedown on Breakwater’s investment in its New Brunswick lead-zinc mine.

Nevertheless, predictions that a sub-US$20-per-bbl. oil price will spell a quick end to the recession helped to drive the price of silver up US23 cents per oz. to US$4.06 today. While investors continued to digest this week’s economic data, the composite 300 index eked out its first gain in four trading sessions. Representing a wide measure of Canadian share values, the 300 climbed 6.29 points to 3550.70 on a volume of 23.3 million shares.

Today, both the precious and base metals indices also hit positive territory for the first timein four sessions. Tracking this week’s US$2.50 advance in the price of gold, which closed at US$366 an oz. in London, the gold-silver index gained 3.41 points to close today at 5377.54. The yellow metal hit US$370 earlier in the week, but falling oil prices and the strengthening U.S. dollar combined tostymie any hopes of a rally.

Among gold issues, American Barrick was up 25 cents, LAC was unchanged at $9 and Placer Dome lost 38 cents on a volume of 770,628 shares. Talks between Placer Dome and Corona over the Eskay Creek gold discovery in British Columbia have broken off. But Placer Dome President Anthony Petrina believes problems posed by arsenic in the Eskay ore won’t be as bad as some may think.

The Metals index closed out the week up 44.94 points at 3262.03 as several issues posted slight advances. Cominco was among the winners. It added 50 cents. So too was Inco which climbed by US63 cents to close out the week at US$37.75. The stock is currently edging closer to Inco’s 52-week high of US$38.38.

Having raised roughly $62 million through a U.S. public offering, Metall Mining is now equipped to pay off debt acquired when it bought the Copper Range complex in Michigan. However the shares were unchanged today at $12.38.

In other news, Asamera Minerals was active this week onnews that Gulf Canada Resources is once again attempting to sell its 92% stake in the company. Having moved up 20 cents to $1.30 earlier in the week, shares of Asamera remained at that level today.