Toronto Stock Exchange Trading activity depressed by bearish

A base of support appears to be building around the 3,200-pt mark as another week of directionless trading came to a close. Today’s close of 3,266.15 pts was down 4 pts — typical of the trading activity all week.

Gold bullion, which tumbled through the $400 (US) per oz level last week, remained depressed at $395 on the second London fix today. The likelihood of gold testing $380 in the near future is growing and traders continue to shun of gold shares.

Despite the growing disinterest, no better time has emerged for buying assets — a view not lost on cash-rich mining companies with long-term commitments to mining.

Acquisitions, both large and small, are being made. This week’s deal sees Noranda Inc. with affiliate Hemlo Gold buying a 9.8% interest in Granges Exploration. Noranda closed at $21.63 up from $21.50.

Granges is a mid-sized gold producer with revenue from two mines in Canada and a large heap leach operation in the U.S. The company also holds a large portfolio of exploration properties. Just last month, Noranda stepped into the market to buy a controlling 20% interest in Falconbridge Ltd.

Hemlo Gold stayed steady at $12.50. One of Canada’s lowest cost producers, the issue is finding appeal amongst institutional investors as a defensive gold stock during times of price weakness.

Granges continued to recover from a dismal performance which knocked the issue down to a low of $3.35. Today’s close saw Granges move back above $4 to $4.15.

American Barrick Resources was stronger at $21.38 up 63 cents . The company has received a listing for its shares on the Swiss stock exchange. Lac Minerals was also better, trading to $12.13. Lac is fighting to have a retrial of its original case with Corona over the Page-Williams mine at Hemlo.

Echo Bay Mines is being tagged a high cost producer by some analysts. The issue was firm at $20.63. Newhawk Gold Mines, with a 60% interest in the rich Sulphurets gold deposits in B.C., popped to $3.90 in active trading before closing back at $3.50 today. The company is backed by Corona Corp.

More asset shuffling in the Noranda group. Minnova Corp. and parent Kerr Addison Mines, which is controlled by Noranda, are planning to put their exploration properties into a new company. Minnova was steady at $20.50 whereas Kerr closed at $19.38 — up 38 cents .

Wharf Resources, which was taken over by Dickenson Mines, was 20 cents better at $4.50. Wharf and Dickenson are planning to amalgamate. Dickenson lost a quarter to $4.75. Dickenson remains sensitive to low gold prices due to its 100% interest in the high cost Arthur White mine at Red Lake, Ont. Wharf’s low cost gold production and strong reserve base would be a much-needed boost to Dickenson’s bottom-line performance.

Agnico Eagle Mines, which has been known as a one-mine gold company, has never looked to expand reserves and production via acquisitions, mergers or takeovers. Now with problems at its Telbel mine at Joutel Que., that philosophy must be questioned, considering the multitude of opportunities which came and went during the past five years. Agnico got back over $13 closing at $13.25.

Base metal miners Falconbridge Ltd. and Inco Ltd. were both easier. Inco traded more than 200,000 shares to close at $33.50 down from $33.63. The world’s largest nickel producer is expected to earn more than $6(US) per share this year from record output and firm prices. The much anticipated third quarter results are expected shortly.

Falconbridge dipped to 20.38. More is expected in the short term concerning its major shareholder Noranda and that company’s intentions. Many feel that Noranda will increase its interest with the objective of taking complete control of the company.

Northgate Exploration, flush with more than $150 million in cash, plans to add to its coffers. The company plans to sell its non-North American mining assets to Westfield Minerals for about $30 million by 1990. Northgate was firm at $7.25.