Toronto Stock Exchange Profit-takers spell end to brief gold price

It is, as they say, the season to be jolly. But as the Christmas festivities moved into full swing during the week ended Dec. 24, mining executives were contemplating what moves to make after the turkey has been used up. The exploration department at Noranda, for example, will be attempting to determine just how far the Lightning zone extends east from Noranda, Freewest Resources ground on to disputed claims held by COATS-listed company called Card Lake Resources.

Results from Holloway Twp. indicate that Freewest will be able to announce a reserve increase on the Lightning zone some time in the new year. The Freewest issue was down 1 cents by week’s end to $2.93.

As Hemlo Gold recently purchased $500,000 worth of Freewest shares at $3.30 each, Harker- Holloway observers saying that it will be Hemlo Gold rather than Noranda that eventually takes over Freewest.

A long-awaited decision by the U.S. Federal Reserve board to lower the interest rate it charges on loans to banks offered fresh impetus to gold stocks. Investors shifted into gold after the Bank of Montreal said it was cutting its prime lending rate by 0.25% to 12.75%. The other banks immediately followed suit.

But after holding its ground, a spate of profit taking drove the gold price down US$2 recently to US$383.75 per oz. During an active day of trading, that coincided with the Triple Witching Hour (when options come due), the composite 300 index gave up 11.66 points before closing at 3243.77.

Among gold issues, American Barrick Resources was even at $23.88. Cambior and Teck were also steady at $11.63 and $20 respectively. Hemlo Gold gave up 13 cents and Placer Dome was down a quarter.

Shares of Corona remained even as the company held discussions with its lenders in Vancouver. Among the topics discussed were the company’s significant debt load and the cost of developing the Eskay Creek gold project in British Columbia.

The was no movement in the price of Canamax Resources shares after the company said it was taking a $39.5-million writedown on assets. The issue closed at 38 cents.

Still on the gold front, a 145-ft. intersection averaging 0.29 oz. gold per ton was cut on Winnemucca, Nev., claims held by LAC and Equinox Resources. The intersection was located in a hole drilled from a 100% LAC owned adjoining claim which hit the joint venture ground at a depth of 637 ft.

Ontex Resources President Sam Fuda said he has spoken to Placer Dome about the 18-claim Brookbank gold property which was recently awarded to Ontex, following a court battle with Metalore Resources.

Under an agreement with Metalore, Placer Dome had the option to earn a 50% stake in the claims. But Fuda says he has received inquiries from other majors and is now waiting for the best offer.

After dropping to $3.50 earlier in the week, shares of Metalore recovered some ground to end the week at $4.75.

Meanwhile, the recent 22.66 drop in the metals and minerals index coincided with weaker share prices among the big metal miners. Noranda was the biggest casualty. It gave up 62 cents. Inco was down 37 cents and Cominco closed down 13 cents at $21.

As the deep thinkers at Minnova review data from a feasibility study at Audrey Resources’ Mobrun polymetallic mine near Rouyn- Noranda, Que., President Guy Hebert is also on the lookout for companies willing to offer $5-7 for 10 million treasury shares.

A legal impediment to the possible development of McFinley Red Lake Mines’ Bateman Twp. gold property near Red Lake, Ont., was removed recently when McFinley and contractor Dominion Bridge settled a long-standing dispute. McFinley added 1 cents to close at 19 cents.

McFinley now has 18 months to find a joint venture partner and pay off an $1.8-million debt relating to construction of a 100-ton-per-day mill.

Following a request by the company, shares of Bond International Gold are expected to be delisted from The Toronto Stock Exchange at the close of business Jan. 18.