Toronto Stock Exchange Volumes and indices decline in quiet trading

Despite the fact that inflation rates in the U.S. and other countries are increasing, the effective and quick action of the central banks in bumping interest rates up, is keeping gold bugs on the sidelines. Concerns are mounting that even higher rates will be required to cool the supercharged economy. Such action, if not closely monitored, could push the economy back into a recession.

The lack of direction in market activity over the past two weeks suggests most investors feel the economy is at the crossroads — the only uncertainty being which way it will go?

Today’s loss was the function of the metals and gold indices which both suffered losses. Metals and minerals gave up 24.33 pts to close at 3394.05 pts. The gold and silver index was off 48.1 pts, closing at 6048.26 pts.

Major gold miners recording declines included American Barrick Resources which closed at $27.13. Echo Bay Mines was also easier, closing at $19.13; off a quarter for the day. Canada’s largest gold producer, Placer Dome Inc. gave up 25 cents to $16.25.

A Canadian gold fund, Gold Cor has come to the aid of Dickenson Mines in its bid to thwart Corona Cor in its takeover bid. White knight Gold Corp is bidding a higher price for both Dickenson and Kam-Kotia Mines, Dickenson’s affiliate (see front page story). Kam- Kotia was better at $2.90 whereas Corona’s A shares were firm at $8.75.

Gold Corp has had a dismal investing record of late. Last year it sunk, along with CSA Management, its partner, $15 million into the Tartan Lake gold mine. A fraction of that will ever come back to the companies, which are looking to the courts to get their money back.

Hemlo Gold Mines bucked the downtrend, trading more than 220,000 shares to close at $14.25 — up 37 cents . The company operates one of Canada’s lowest cost gold mines at Hemlo, Ont.

Most base metals issues took losses despite the fact that metal prices remain near record highs. Metall Mining, which is spending more than $90 million on a copper facility in the U.S., was easier at $13.13. Inco Ltd., is looking to another record quarter this year. The issue was better at $36.13. The company’s controversial shareholders rights plan, which was passed last year, will come under attack again this year at the company’s annual meeting next month.

A gold discovery on Inco Gold’s Casa Berardi property in Quebec, generated some interest. Junior partner Golden Knight Resources which holds a 40% interest in the mine and surrounding property, lost 25 cents to $9.50.

Falconbridge Ltd. was firm at $28.88. The company is also enjoying the benefits of high nickel and copper prices. Cassiar Mining reported record earnings of $22 million. The company operates a copper mine in B.C. which it purchased last year from Newmont Mining. Cassiar advanced to $5.63.

Newhawk Gold Mines slipped to $3. Talk from the company’s Sulphurets gold project in B.C. is that reserves and grade will be lowered again. Numer ous problems have been encountered during underground exploration. Granduc Mines, which also holds an interest in the property, was steady at $3.15.

Stan West Mining’s McCabe mine has been shut down. Located in Arizona, the mine has had problems from day one. Stan West gave up a dime to $1.

Even the big players run into problems. Operations at Hope Brook Gold Mines mine in Newfoundland are still not meeting expectations. The mine has suffered from grade and metallurgical problems. The issue, which is controlled by BP Canada, was weaker at $3.70.

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