Toronto Stock Exchange U.S. dollar weakness underlies market

Struggling equity markets around the world continued to display signs of fragility as nervous investors watched market indices move over wide ranges all week long. In the U.S., the Federal Reserve Board made only a marginal effort to stem the fall of the U.S. dollar. In West German mark and yen terms, the dollar hit eight and 40 year lows respectively.

On the tse, the composite index continued to flirt with the 3,000-pt mark. Following three days of gains, the composite began to slide again, giving up 37.56 pts today to 2,968.35 pts. The beleaguered metals and minerals index, which is weighted with base metal producers, gave up 54.21 pts to 2,252.92 pts. Recession fears are being reflected in the ravaged share prices of major producers of nickel, copper, zinc and lead.

Bullion prices trended lower, albeit marginally, to $465(US) per oz of gold. Silver was also easier at $6.55(US) per oz. As a result, the tse gold index gave up 182.94 pts to 6,613.19 pts at the close.

Senior producers, who have made up some ground following the Oct 19 crash, include Placer Dome Inc. The giant gold miner had some good news for its shareholders, reporting that reserves at the Porgera deposit in Papua New Guinea have been increased to 5.7 million tons grading 0.744 oz gold per ton. Placer holds a 25% stake in the project. The issue closed at $16.63. Lac Minerals, which was under $9 at one time last week, closed at $10.75.

American Barrick Resources continued to hold ground at $23.50. Talk about the company’s Betze deposit in the fabled Carlin area of Nevada, is of another major increase in gold reserves. Echo Bay Mines was also active, trading at $24.63.

Inco Ltd., which traded an impressive 367,275 shares for a value of $7.1 million, failed to get over the $20-mark as it closed at $19.50. Strong third quarter results from the giant nickel miner, reflected robust nickel and copper prices for the period. Many analysts have been picking Falconbridge Ltd. as a buy. At prices of $19-$20 per share, most feel the issue is undervalued.

Noranda Inc. is also enjoying the boom in commodity prices, chalking up a $222 million nine-month profit. The issue was steady at $21.25. Galactic Resources, run by the dynamic Robert Friedland, continues to demonstrate its acquistion driven philosophy. The company, which has a piece of the Newmont takeover bid made by T. Boone Pickens, has acquired an interest in a huge 300 million ton low grade copper-gold deposit in the Philippines. The issue closed at $8.63.

Claude Resources, which is one of the senior players in the La Ronge area of Sask., drifted lower to $3.90 after opening at $4.50. Last week, Richardson Greenshields pulled Claude’s proposed $12.5 million share financing. Coin Lake Resources, which is involved with a heap leach development project in the U.S., apparently completed a $3.2 million financing in Europe — where else?

Kerr Addison Mines, a company not known for making quick investment decisions, saw an opportunity and acted. Kerr purchased 1.2 million share of msv Resources for $3 per share, which gives it sizeable piece of the company (see front page story). msv has a 49% interest in one of the best undeveloped gold deposits in Quebec — the one million ton Eastmain deposit grading 0.45 oz gold per ton. Placer is the operator. Kerr was active at $18.50.

Golden Shield Resources, which bought Kerr’s Virginiatown gold operation this year, found little luck or gold at its Mirado mine near Kirkland Lake, Ont. The operation, which at one time was being touted as a potential big money maker for the company, was shutdown months ago. The issue closed at $2.40.

Another issue which has experienced a much greater fall than the average is Pronto Explorations. Once a $5 issue just a month ago, Pronto closed at $1.19 after hitting a low today of 71 cents .