Toronto Stock Exchange Rebounding gold adds some life to majors

Despite the firming gold price, which resulted in 4.42 pts being added to the 5696.62-pt gold and silver index, overall trading activity continued to be subdued. The composite index recorded a marginal 3.05-pt gain to 3568.60 pts on improved volume of 22.8 million shares. The metals and minerals index gave up ground, slipping 23.27 pts to close at 3314.26 pts.

Placer Dome Inc. advanced on bullion’s strength, adding 12 cents to $15.75. American Barrick Resources stayed unchanged at $25.50. The stronger gold price failed to dispel investor concerns about Agnico- Eagle Mines. The issue fell to its low of $11.25. The one-mine company has run into operating problems at its mine near Joutel, Que. Gold prices below $400 (US) an oz don’t help the situation either.

Cheni Gold, which just opened a new mine in B.C., tumbled to a new low of $3.50 before recovering to $3.55. The mine was hurt by a strike.

Canamax Resources is going through some difficult times. First its founder and President John Hansuld leaves, then its problem mine, Ketza River, gets turned down by a suitor. The issue was weaker at $3.60. Belmoral Mines, which planned to buy the mine, backed down on the deal this week. Pacifc Trans-Ocean Resources, which holds a 50% interest in Ketza and almost $13 million in debt, hit a new low of 6 cents before managing to scratch back to 9 cents today. Just a year ago, one Pacific share fetched more than $3.

Highwood Resources, which once touted its beryllium project in the N.W.T., was also on the sellers list, falling to $1.65 this week. Today’s close was $1.80.

Inco Ltd. showed some life, as 157,000 shares were exchanged. The issue slipped to $34.88. A record first quarter is expected by the company which is reaping the benefits of $7 nickel.

Falconbridge Ltd. was firm at $29.50. Street talk is that a deal has been agreed to between the company and suitor Noranda Inc. Unconfirmed reports say that Noranda will get a 50% in the world-class Kid Creek deposit for $250 million and its 19% stake in Falconbridge. Noranda was easier at $22.63.

Falconbridge affiliate United Keno Hill was also weaker, trading at a low of $3.45. The company has shutdown its silver mining operations in the Yukon.

It’s always amusing how science, which few investors know anything about, can spark buying. Take the fusion discovery made in Utah. The experiment uses a tiny palladium cathode. Suddenly, palladium is seen as a wonder metal and people start buying palladium plays. As a result, Madeleine Mines caught the eye of more than one person, as the issue shot up to $4.25 before backing off to $4.05. Last week the issue was steady at $2.85. The company has a platinum group metals prospect in northern Ontario.

New Golden Sceptre Minerals and New Goliath Minerals perked up this week on news that mining entrepreneur Patrick Sheridan, plans to increase his stake in the former company to 25%. The Hughes-Lang Group, which runs both companies, is planning a poison pill merger of both companies with a private company controlled by themselves. New Golden Sceptre was firm at 25 cents whereas Goliath closed at 13 cents .

LynnGold Resources was a winner this week, but not because of its gold mine. The issue advanced to $2.15 on news that it plans to re-examine a large former producing nickel-copper mine in Manitoba. A potential $100-million development, the mine could be reopened within three years.

Cominco Ltd. slipped to $26.13 whereas copper and zinc miner Minnova Inc. gave up 75 cents to $20.50. Pegasus Gold was also easier, slipping to $12.75. Skyline Explorations, which was the first company to begin gold production in the tough Iskut River area of B.C., took it on the chin as the issue fell to $5.38 before managing to recover to $5.50.

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