Toronto Stock Exchange (January 13, 1992)

The recent trend toward lower interest rates sent New York’s Dow Jones Industrial Average of blue chip stocks to record heights during the week ended Jan. 7 as investors jockeyed to get in on the rally.

But even though Toronto’s 300 composite index advanced throughout much of the report period, a quiet week on the metals front prevented the majority of mining stocks from posting any substantial gains.

Reflecting a US$2.50-per-oz. decline in the price of gold, which closed at US$350.30 today, Jan. 8, in London, most of the major precious metals issues including Placer Dome, American Barrick Resources and International Corona were down.

On the base metals front Noranda also took it on the nose as analysts anticipate a difficult year ahead for this sector.

Many are keeping a close watch on Toronto zinc-lead miner Curragh Resources which is trading close to an annual low of $3 after shelving plans to issue a $55-million convertible debenture.

With almost $300 million in debt, Curragh is negotiating to sell assets including a 20% stake in Spanish smelter owner Asturiana de Zinc, which owns 30% of Curragh’s Stronsay zinc-lead project in British Columbia. The Westray coal project in Nova Scotia is up for sale and analysts are hoping that Curragh will postpone development of the $180-million Stronsay project until the economic situation improves. Curragh finished the week at $3.25. Nevertheless at today’s close of 3515.64, the composite 300 is far short of the record 4112.86, struck on Aug. 13, 1987, and analysts feel that the bull run may have some way to go. The index closed up 2.72 points after 36.4 million shares valued at $455.9 million changed hands.

LAC Minerals, the volume leader with just under one million shares exchanged, gave up 25 cents today to close at $8.50. American Barrick was down by $1 to $29.75. As investors waited for Placer Dome to announce its intentions for its Mt. Milligan copper-gold project, the issue hit a new low of $11 after falling by 50 cents. Corona bucked the trend to advance 5 cents to $4.65. Madeleine Mines also posted an impressive 40 cents gain as investors look forward to a “limited startup” at the Lac des Iles palladium-platinum project near Thunder Bay, Ont. Platinum was up US$1.30 per oz. to US$335.50. Some knowledgeable observers at this week’s Canadian Mining Hall of Fame dinner in Toronto expect the flow of information from Fort Knox Resources’ Shining Tree, Ont., nickel play to dry up now that Inco is in charge of operations. Fort Knox closed down 5 cents at $1.05 despite raising $272,000 for further exploration on the property. Mining sources say Inco’s involvement spells the end of hopes for another Fort Knox rally. Inco, which owns 41% of the junior, rebounded to post a gain of 25 cents today. Down to a low of 16 cents this week, Breakwater Resources is one of six mining issues to be deleted from Toronto’s 300 composite Feb. 3. Others that don’t meet the TSE’s criteria for inclusion on the index are Hudson Bay Mining and Smelting, Campbell Resources, Dickenson Mines class A, Galactic Resources and MinVen Gold.

Saskatchewan uranium miner Cameco, which added 38 cents today, and Vancouver-based Glamis Gold are the only two mining issues being added to the composite 300. Glamis was unchanged at $3.75.

Breakwater is negotiating with a third party to arrange a debt and equity restructuring because it is unable to pay the interest now due to holders of its Swiss bonds.

There was good news for shareholders of Northgate Exploration which received final approval for a rights offering. The company said it set the exercise price at 80 cents a share or 69 cents for shareholders living in the U.S. Northgate was even today at 85 cents.