Toronto Stock Exchange Record breaking week capped by profit taking

A bout of profit-taking capped another record-smashing week on the Toronto Stock Exchange. Fueled by increasing tensions in the Persian Gulf, gold bullion prices soared on Aug 3 to $478(US) per oz. At the opening bell on Aug 4 the golds blasted off, pushing the gold and silver index to a new high of 10,057.41 pts.

The 8-day gold rally was capped today by a natural bout of profit- taking which pushed the index down 314 pts to 9,743.18 pts. The tse composite index closed down at 4,040.88 pts — off 14 pts for the day but up 40 pts on the week. Bullion dipped to $468 (US) at the close.

If anything, the double whammy of the Persian Gulf drama and the looming strike planned by the 200,000-strong membership of South Africa’s National Union of Mineworkers, demonstrates once again the extreme volatility of gold. num has threatened massive strikes in the past but has always reached a settlement at the 11th hour. This coming Sunday is D-Day once again in South Africa.

Not unexpectedly then, major gold issues posted a modest downward correction today. American Barrick Resources which recently split two for one, ended the day at $29.50 — that’s $59 on the pre-split scale. Rumors on the street that Barrick was planning an assault on Placer Development were discounted by a Barrick spokesman. Talk was that Barrick had lined up a $3- billion line of credit in Europe.

Placer, which is busy with a merger plan with Dome Mines, was easier at $25.38. The warrant was steady at $21.38. A mere two months ago, that warrant could be had for $16. A monkey wrench has been thrown into the Placer-Dome deal. The men from the “Land Down Under” via their Canadian vehicle Giant Yellowknife Mines, have made an offer to purchase control of Dome from troubled Dome Petroleum for $448 million. Giant was quiet at $27.

Sullivan Mines, which successfully staved off a hostile takeover bid from a Montreal-based junior, was trading at $7.13. The company plans to merge with its largest shareholder Cambior Inc.

On the base metals front, Falconbridge Ltd. continued to perform well, trading a whopping 604,235 shares for a market value of $17.9 million today. The issue was solid at $29.75. Big news from the nickel miner is an impressive base and precious metals discovery in Sudbury, Ont. The deposit is more than three times richer than anything the company is currently mining up there (see front page story).

Inco Ltd., which is also benefiting from improved base metal prices, was strong at $28.25, not far off its 52-week high of $29.75. Noranda Inc. was steady at $36.38.

In the midst of these big guns, was little Golden Terrace Resources which churned through an incredible 3.8 million shares to close on Friday at $2.75. At press-time the issue was still under a cease trade order. Brokers say that a huge short position, which developed on Friday, is causing problems. As a result, no more short trades are being allowed once the market reopens. A potential squeeze is shaping up here.

Rouyn Mining raced to a new high of $6.62 this week before settling back to $6.38. The Rouyn, Que.- based company is well on its way to gold production next year. Jean- Guy Rivard, Rouyn’s president, gets top marks for putting together an impressive, well-run company in just three years.

Echo Bay Mines doesn’t sit on its achievements for long. At presstime, the c ompany and partner Coeur d’Alene Mines, purchased the Kensington gold property in Alaska for $20 million(US). The companies will share the acquisition costs equally. Echo Bay closed at $34.38.