Toronto Stock Exchange Volume wilts as summer doldrums take hold

Rising interest rates have put a lid on the summer rally — at least for the time being. Combined with summer holidays and investor concerns over inflation and the economy in general, our review week can by summed up in one word — lethargic.

Today’s volume wilted to 18 million shares resulting in a marginal gain of 2.23 pts to 3,419.78 pts on the composite index. The metals and minerals index reflected modestly weaker metal commodity prices, slipping to 3,131.89 pts.

Bullion remained sloppy, trading at $435 (US) per oz on the second London fix. The weakness in bullion is a result of higher interest rates and a firming U.S. dollar. Fears are mounting that things could get worse for gold before getting better. The precious metal could test the $400-mark in the next few months before coming back to test $500.

On a positive note, not all the bulls have gone fishing this summer. R. G. Boaz and J. D. Donegan of Midland Doherty are calling a 4,000-pt index by year-end and 4,500 pts by the end of 1989.

Probably one of the most entrepreneurial mining companies in North America, Galactic Resources is embarking on a bold $200 million gold-copper project in the Philippines. The markets remained cool to the news, clipping 25 cents from the issue. Construction lead time at the project is about five years. As one broker quipped, “its hard enough trying to get investors to keep their money in an issue for two weeks,” five years will be a hard sell. However if anyone can pull it off, Galactic’s Chairman Bob Friedland can.

New issue Golden Myra Resources hit a new high of $1.48 on volume of 178,000 shares today. The issue reacted to news that neighbouring company Muscocho Explorations has quadrupled reserves at the Magino gold mine property near Gourdreau, Ont. Muscocho was better at $4 (see front page story).

Neptune Resources was steady at $4.25. After what was probably months of nerve wracking work, Neptune appears to have lined up $120 million in financing to bring its big Colomac project on stream. The mine could be in production next year churning out 200,000 oz of gold per year.

Camindex Mines gave up a nickel on news that MVP Capital is mounting a takeover bid. MVP also plans to kick in a $14 million loan. Investors displayed little enthusiasm for the deal, as MVP remained unchanged at 95 cents . Camindex’s main asset is a 51% stake in a placer gold operation in Alaska which appears to have made money for everybody — except Camindex.

Pamorex is getting a cash injection of $16.5 million following the sale of its 50% stake in the Bell Creek gold mine to Canamax Resources. Pamorex now has cash per share of $1.14. However, investors are not interested in cash, as the issue dipped to 77 cents . Pamorex President Tony Ransom tells us that the cash will fund the company for development and acquisitions in the precious metals field. Canamax was firm at $7.88.

Base metal miners put in a mixed performance. Inco Ltd. was marginally easier at $40.63 on volume of more than 200,000 shares today. Falconbridge Ltd. was also easier at $26.50. Cominco showed some strength, closing at $21.50.

Northgate Exploration continues to deny rumours that the company is planning a run at Wharf Resources. Northgate was steady at $8 whereas Wharf, which is controlled by Dickenson Mines, was better at $5.75.