Toronto Stock Exchange Rising rates take toll on bullion and

Rising interest rates, and the prospects for more increases, killed the New Years rally which at one time was poised to breach the 3700-pt level. Today’s action saw another 20.56 pts clipped from the composite index which closed at 3551.56 pts; off more than 30 pts for the week.

Bullion continued to take a beating, retreating $2 to $384.05 on the second London fix. If the Fed is successful in supressing inflation, then gold looses much of its lustre. On the supply side, investors are also growing more concerned about increasing gold production. James Capel, a British investment house, is forecasting a price of $300 by year-end.

All this negative news took its toll of the gold and silver index, which tumbled 2.68% or 164 pts to close at 5965.48 pts. American Barrick Resources, which made a healthy advance earlier in the week to $26.88, slipped to $25.50 today. Barrick is poised to become one of the world’s largest gold miners in the 1990s when its immense Goldstrike deposit reachs full production.

Echo Bay Mines was easier 50 cents to $18.50. Echo Bay is another of the new breed of gold mining companies, well-capitalized and financially sound. Despite the sell-off in gold equities during the past year, the major companies have weathered the downturn better than the juniors.

Granges Exploration slipped a dime to $3.40. MIM Holdings is planning to put $50 million into the company’s treasury in exchange for 33% of its issued shares. Due diligence is in process. Bond Gold was unchanged at $8.63. The company’s second Canadian gold mine is a possibility near Shoal Lake, Ont. Bond is considering an underground program at its Mikado project.

Base metals issues were steady following several weeks of directionless trading. The metals and minerals index made a modest 1.85-pt advance to 3388.01 pts. Zinc, copper and nickel prices remained firm near their record highs.

Inco Ltd. was better at $35.63, up 25% on volume of more than 325,000 shares. With nickel hovering over $8 (US) per lb, look for an all-time record first quarter profit performance this year. Falconbridge Inc. gave up some ground to $28.13. Noranda Inc. reported profits in excess of $600 million or $ 3 per share. The issue slipped to $23.88 today.

One of the loneliest juniors around must be Audrey Resources. For the past few weeks, it’s the only junior to be found in the new high list. Audrey, under the direction of president Guy Hebert, had the foresight to get into zinc and copper several years ago. At current prices, its Mobrun zinc-copper mine near Rouyn, Que., looks better than most gold mines. Audrey, with the backing of Northgate Exploration, is building a new mill on site. The issue was firm at $4.05 after reaching a new high of $4.30.

Two issues dipping to new lows this week included Joutel Resources at 23 cents and Consolidated Professor Mines at 69 cents . Joutel closed at 24 cents whereas the Professor was firm at 72 cents .

Encouraging drill results from a gold play near Timmins, Ont. helped Trader Resources perk up to 53 cents before sliding back to 41 cents today. Westfield Minerals, control of which was sold to an affiliate of Hees International Bancorp, was weaker at $1.75. Nevada Goldfields was steady at $2.40.

The sell-off of its oil and gas assets by Denison Mines was met with caution by investors. Denison plans to concentrate on uranium. The issue fell to $6.

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