Toronto Stock Exchange Senior gold issues rack up solid gains

Since the Friday the 13th mini- crash, gold bullion has gained about $10(US) per oz. London’s second fix was unchanged at $373.05. Metals and minerals continued weaker, losing 14.04 points to close at 3447.86 points. Volatility in copper and nickel prices, combined with a growing sense that the metals cycle is topping out, has fueled a sell-off in the securities of senior base metals producers in recent weeks.

Major companies showing gains in the gold sector included American Barrick Resources, which moved up to $31.88 from $31.25. As reported in last week’s issue, talk is that Barrick has another large gold discovery near its Carlin area mine in Nevada. Sources now say that the results reported were conservative.

Euro-Nevada Mining, which holds royalties on the Barrick property, was unchanged at $6.50. The report of a new find has added more than $2 to Euro’s share price in the past two weeks.

LAC Minerals was also strong, surging to $13 on volume of more than 500,000 shares. Talk is that LAC has a new gold find east of the Hemlo camp in Ontario. Several prominent prospectors have stated the find is significant. LAC has yet to confirm or deny the rumor.

Other senior gold issues such as Corona Corp. were steady at $8.88. Placer Dome and Echo Bay Mines closed firmly at $19.38 and $18.75 respectively.

Aur Resources bounced back aggressively to close at $12.63 on volume of more than 250,000 shares. Talk from the Val d’Or area of Quebec, where Aur has made an important copper-zinc find, is that 2-3 holes have returned visually good results. Assays are pending. Aur had taken a bit of a beating after the mini-crash, trading in the $11.50-11.75 range.

Sources also report that Louvem Mining, which claims a 50% interest in the Aur find, is prepared to settle its lawsuit against Aur but for not less than a 50% stake in the project. Louvem was also firm at $8.50 on volume of more than 600,000 shares. St. Genevieve Resources, which controls Louvem, closed higher at $2.18.

Geddes Resources, busy with its big Windy Craggy copper deposit in British Columbia, has attracted the attention of Cominco Ltd. Cominco purchased a 17% interest in Geddes on the open market and is obviously eyeing the Windy Craggy as a significant future source of copper. Northgate Exploration controls Geddes and runs the company. Two issues which have joined the long list of mining failures since 1987 are Hayes Resources and its affiliate LynnGold Resources. The latter company is closing its MacLellan gold mine near Lynn Lake, Man. on Nov 6. Low gold prices and high costs killed the mine. LynnGold dipped to 30 cents whereas Hayes was at a new low of 11 cents .

Small comfort can be taken in the fact that Hayes was controlled by American Barrick and DCC Equities, two seasoned and well- respected mining investors.

Franco-Nevada Mining, which controls Euro-Nevada, was also active this week, trading up to $13.50. The issue has added 75 cents during the week. Franco holds lucrative royalties on Barrick’s Goldstrike mine in Nevada and responded to improving gold prices.

Inco Ltd. was unchanged at $35.50. The issue has experienced some weakness of late on easing nickel prices and lower earnings. Despite the lower price, Inco remains a financially strong company capable of generating good earnings at current nickel prices well in excess of $4(US) per lb.

Black Hawk added 5 cents to $1.35 on news of encouraging drill results from the company’s Minago nickel deposit in Manitoba. Drilling yielded numerous wide intersections grading in excess of 1.1% nickel. The company feels it can add significantly to the project’s existing reserves.

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