Toronto Stock Exchange Royal Oak settles with dissidents in Pamour

The consolidation that has become fashionable lately in the gold industry gathered steam during the week ended June 25, with Royal Oak Resources cutting a deal with dissident shareholders in the Pamour group.

Details of a new share exchange ratio carved out by management of Royal Oak and the Pamour companies (including Giant Yellowknife Mines) were scheduled to be mailed out, according to reports from Vancouver. Shares of Royal Oak edged up five cents to 90 cents, while Giant Yellowknife gave up 50 cents to close at $5.50.

The new Royal Oak merger proposal came just days after a committee of Hemlo Gold directors agreed to exchange $80 million worth of the company’s shares for the gold assets of Noranda.

However, the failure of gold to climb above this week’s US$363-366 per oz. trading range appeared to override the potential impact that these transactions may otherwise have on the companies involved. While future production from the Brewery Creek, New World and Holloway projects is expected to add 195,000 oz. to Hemlo’s annual output within five years, the issue stayed even at $10.

As merger discussions continued between American Barrick Resources and Newmont Mining, shares of Barrick moved down by 63 cents to $24.38. By contrast, shares of Amax Gold added an impressive $1.75 to end the week at $16.

Meanwhile, North American markets continued to recover from this week’s securities firm scandal in Japan which shaved 509.62 points from Tokyo’s Nikkei index during one day alone. Toronto’s composite 300 index, which lost 37 points on the day the scandal was announced, closed up by 2.4 points today (June 26) to 3481. Volume on the day was 25.1 million shares, worth $251 million.

According to recent economic statistics, the fourth quarter of 1990 and first quarter of 1991 represented the worst 6-month period for the Canadian economy since the Second World War. Not even the 1981-82 recession had such dismal back-to-back quarters, according to reports. However, because Canada’s gross domestic product shrank less than expected during the first quarter, some analysts feel that the economic picture looks more rosy.

Active stocks this week included Equinox Resources, which is being driven by results from its Rosebud joint venture with LAC Minerals in Nevada. Shares of Equinox advanced this week by 38 cents to $2.13, while LAC added 13 cents to end the week at $9.

Judging by this week’s 30-cent increase in the price of Parlake Resources shares, investors favor the company’s decision not to proceed with a rights offering proposed earlier this year. The company says it will look for alternative forms of financing in view of the Ontario budget and other pending provincial legislation.

Audrey Resources was down 50 cents while the company continued to talk to a European buyer regarding the sale of its copper-zinc-gold-silver mine near Rouyn-Noranda, Que. Audrey shares are also to be listed on NASDAQ in the U.S.

The week’s advance of US$6.65 per oz. in the price of platinum was good news for Madeleine Mines. However, the company appears headed towards some sort of showdown with regulatory authorities who have already charged Madeleine and President Patrick Sheridan with violating Ontario’s environment laws. Environment ministry officials, who are monitoring activity at Madeleine’s Lac des Iles palladium/platinum project near Thunder Bay, Ont., say they are preparing an announcement for release within the next two weeks.

Shares of Hope Brook Gold were delisted this week after shareholders gave parent company BP Canada the go-ahead to acquire the 24% stake in Hope Brook it didn’t already own for $8.8 million. Hope Brook share purchase warrants will continue to trade until July 31.