Toronto Stock Exchange Soaring nickel sparks Inco, Falconbridge

Nickel, the metal which no one wanted during most of the 1980s, can’t be had today. As a result, several records were set as the nickel price rally, which started at the beginning of the year, exploded to new heights. The London Metals Exchange’s morning spot price opened at $8.71(US) per lb — a new lme record, and from what we can tell, a record for nickel anywhere.

Not unexpectedly, then, a wave of buying engulfed the tse from the opening bell — with most of it chasing Inco Ltd. and Falconbridge Ltd. Today the big nickel miners posted record volumes of 800,000 shares and 1.1 million shares respectively. Inco hit a new high of $31.75 — up 75 cents . Falconbridge, which has lagged Inco because of its dispute with the Dominican Republic, added more than a dollar to $24.63. To put the buying binge into perspective, the dollar value for both issues exceeded $50 million for the day.

With the index strongly weighted by both issues, the Inco-Falconbridge duet was the main reason behind the rise of 29.34 pts to 3,359.79 pts. — a 1988 record.

The metals and minerals index reflected the euphoria with a 80.26- pt gain to 2,832.27 pts. You guessed it, also a 1988 record. Bullion, which has been relatively disappointing, managed another gain. The second London fix was $449.50 (US) per oz.

After testing dangerous lows of $425 per oz just a month ago, gold has managed to scratch back and build a base at $440 per oz. The gains added confidence to the gold equity market which responded with a gain of 71.36 pts to 6,620.7 pts.

Echo Bay Mines was up marginally to $26.75 as was American Barrick Resources, which closed at $26.13. Hemlo Gold, which is building an immense cash war chest from operations at Hemlo, was also stronger at $15.50. Look for more acquisitions in the future from this company.

Galactic Resources managed to hold its ground at $7.13 after news filtered back from Europe that the company was struggling with its planned $45-million(US) exchangeable debenture issue. Carrying a hefty 7% coupon, 65% of the bond can be exchanged into shares of Newmont Mining and the remainder into Galactic shares.

Taking one more look at nickel, we have mentioned Hudson Bay Mining and Smelting over the past four weeks. HudBay is bringing its 60%-owned Namew Lake nickel- copper mine on stream this summer. With a grade of 2.44% and low mining costs, the deposit is going to generate buckets of cash for HudBay. Several weeks ago we noted the issue at $8. Today, it traded at $9.25.

Not all golds advanced. Noramco Mining Corp. appears to be having a few problems at its Golden Rose mine north of North Bay, Ont. We understand that the problems are in the mill and should be corrected shortly. The issue gave up 37 cents to close at $5.38.

At presstime, the sad news came to our offices of the death of Stephen Roman, the founder of the Denison Mines empire. The company has come through several tough years, as a result of weak oil and coal prices. Dension Mines A shares advanced by $1 to $6.75. At one time it traded up to $7.25. Roman Corp., which is the largest shareholder in Denison, hit $14 before settling back to $13.25 — up $1.75 on the day.

Northgate Exploration dipped to $7.63. Street talk is that Noranda Inc. plans to make a run at the company. Northgate is trading at a discount to net assets. Additonal speculation is that Northgate will make a cash offer for the shares of Wharf Resources, which posted a 50 cents gain. Wharf is exposed to gold production of more than 40,000 oz per year.