Toronto Stock Exchange Panic in Japan fails to ruffle Toronto

Canada’s largest stock market continues to weather the storm that is blowing across the Tokyo Stock Exchange. While Japanese investors watched in horror as the Nikkei index fell by 1,569 points — the second-worst plunge ever recorded on the Tokyo exchange — it was pretty much business as usual in Toronto. Today, Feb. 28, the 300-stock composite index gained 26.42 points before closing at 3686.70.

Although rising interest rates and a slide in the Japanese yen are two of the reasons given for recent events across the Pacific both the gold, silver and metals indexes in Toronto also gained 1.7% and 2.17% respectively.

Earlier in the week, some of the big gold issues lost ground as a big sell-off in the international market sparked a US$10 per oz. drop in the price of gold to $409 from $4.18. But investors appeared to take heart as the price steadied up to close at $407.7 on the second London fix.

Corona was the volume leader this week after announcing a 34% increase in annual gold production and a substantial increase in earnings over 1988 levels. News that the company produced 680,986 oz. of gold last year drove its share price up to 25cents to $9.85.

Corona recently raised its stake in Dolphin Explorations which has asked the Newfoundland government to help pay for development of the Cape Ray gold deposit. Dolphin closed up 3cents at 44cents.

Echo Bay Mines, which lost ground early in tandem with the falling gold price recovered with a 63cents increase. It closed at $18.88. Echo Bay recently brought its 110,000 oz.-per-year Kettle River gold mine into production. Located in Washington State, it is being operated in a joint venture involving Echo Bay and Crown Resources.

Also suffering from the gold price drop was American Barrick Resources which remained steady at $22.13. Horsham, the holding company that controls Barrick fared better as it closed up 38cents at $11.13.

The big news of the week was the announcement by Aur Resources that its Louvicourt Twp. massive sulphide deposit near Val d’Or hasn’t grown any since the last batch of results were tabled in November. Investor disappointment, combined with the long wait for new results, helps to explain why shares of Aur have dropped from a high of $14.63 to today’s $10.25 closing price.

Shares of Aur’s joint venture partner Societe Miniere Louvem could be bought this week for less than $6 but they finished the day at $6.25. According to a report by Richardson Greenshields of Toronto analyst Ray Goldie, the potential size of the 36-million-ton deposit could double as it is still open to the east. That may be why a settlement of the current legal dispute between the two companies is imminent, according to rumors.

Attention is also focused on Casa Berardi, Que., where partners Inco, Cambior and Societe d’Exploration Vior announced two more holes this week at their Douay Twp. gold property. Reported after the market deadline today, they failed to equal the 59-ft. grading 0.23 oz. intersection found in the discovery hole. Results from the two holes, drilled underneath and to the west of the discovery hole, included 2 ft. of grade 0.68 oz. and 12 ft. of 0.42 oz.

Shares of Inco closed up 88cents at $28.63 while Cambior added 25cents to end the day at $17.38.

While Inco was expected to sign an option agreement on Joutel Resources’ Aloigny and Joutel Twp. claims several miles further north, it appears that Noranda Exploration, a unit of Noranda, came up with a better offer. Under a deal signed Feb. 27, Noranda is paying $210,000 cash and spending $1.5 million over four years to earn a 60% stake in those claims. Joutel was down 1cents at 34cents.

Within 24 hours Noranda said it has optioned Nevada Goldfield’s Empire gold project, 40 miles west of Denver, where drilling is expected to begin this month. The big company is earning a 55% interest by spending $5 million and committing itself to production.

Nevada Goldfield responded by adding 10cents to its share price. Noranda common shares remained steady at $21.