Toronto Stock Exchange Mining indices slip, despite gold’s rebound

The volume of shares traded on the TSE this week was characteristic of this time of year — below the yearly average at 15.9 million.

The TSE 300 composite index slipped 87.34 points on the week to close at 3333.5 and all five of the mining-related indices mirrored that slow downward trend.

The gold and silver index, the most volatile of the five market monitors fell 278.27 points on the week, reflecting a $15.75 swing in the price of gold during the period. Today the second gold fix in London was up to $432.85(US). Responding to that anomalous swing, the TSE gold and silver index posted a single-day loss of 55.86.

Among gold mines, Corona Corp. was up 1/8th to $9.50, Lac Minerals was up 5/8 to $14.13 and Placer Dome was up 75 cents to $16.25.

American Barrick, which nearly doubled operating income for the six months ended June 30, traded in lighter volumes, closing at $22.88. Junior explorer Associated Porcupine, which reported four good intersections from another deep hole drilled below the old workings of the Paymaster mine in Timmins, closed at $3.35 up a respectable 15 cents on the week.

Cambior Inc., which has ambitious plans to increase its gold production over the coming years, was up too, trading at $15.75. One property which may soon be added to its list of hopefuls is the Cape Spencer property in New Brunswick, held by Gordex Minerals.

This week, miners also welcomed a reverse in the recent upward trend of the Canadian dollar. After touching the 83.5 cents (US) mark, the dollar slipped to $82.28 today on news that the Canada-U.S. Free Trade Agreement would not get Senate approval in Canada until after a general election.

A lower dollar signals good news for base metals producers who export product to the U.S. — companies such as nickel producers Inco Ltd. and Falconbridge Ltd. could benefit handsomely in subsequent quarters if the dollar goes lower. They were the most-active traders in Toronto this week. Falco made a $1.88 gain and Inco advanced $3.13 to $37.38.

Inco reported a $2.98-per-share profit in the first half on revenues of $1.5 billion, nearly double the $825 million in revenue the lean nickel-winner brought in last year. The company has declared a 20 cents dividend.

At 64.2 cents a pound, zinc producers too, are enjoying high prices — the highest for zinc since 1972. But a rising Canadian dollar has eaten into profits in the first half of ’88 — a trend which could reverse in the next half.

The A shares of Teck Corp., which reported a $21-million profit in the second quarter, traded at $17.25, up 25 cents . Earnings for the diversified major were more than double compared to the same period a year ago.

Gold, zinc, copper producer Minnova Inc., which officially opened the Winston Lake zinc mine in northern Ontario this week, reported a 3,000% jump in zinc revenues. Revenues for the first six months were $16.1 million compared to $516,000. But red ink dominated the company’s bottom line in the first half — about 3 cents a share. The issue closed at $22.00.