Toronto Stock Exchange First-quarter profits push shares to record

The New York Stock Exchange’s Dow Jones Industrial Average reached an all-time high of 3,004.45 during the week ended April 17, as a number of key companies began releasing their first-quarter earnings. Analysts have been expecting the Dow Jones, which measures the performance of 30 blue chip stocks, to break the 3,000 level. But until this week, concerns over interest rates and the recession have prevented the Dow Jones from making the breakthrough. Better than expected first-quarter earnings are, for the moment, easing those doubts.

In Toronto, share prices continued their week-long rally thanks to a 63.34-point increase in the Metals and Minerals index which closed at 3211.26.

Investors took heart from first-quarter results reported by Inco, the free world’s biggest nickel miner. While earnings dropped to 50 cents a share from 64 cents in the year-earlier period, analysts expect Inco to be the chief beneficiary of any future increases in the price of nickel.

Today, as shareholders gathered in Toronto for the company’s annual meeting, shares of Inco gained US50 cents to close at US$40.

A number of other base metal stocks also advanced this week. They included Noranda, which closed up 88 cents at $18.50. Cominco added 25 cents. Rio Algom also participated in the rally after a special dividend, paid out to shareholders, shaved $6.13 off the stock. Rio Algom was up 75 cents to $16.25.

Shares of copper miner Arimetco International continued to rally as investors bought in on the company’s 5-year sales agreement with New York metals trader Billiton Minerals. After touching a new 52-week high of $4.15, the shares ended the week at $3.95.

Meanwhile indications that the Federal Reserve Board will hold steady on interest rates drove the gold price down US$1.10 per oz. to US$360.65 in London. “As long as high real interest rates are available in money market instruments of almost every currency, the gold market is likely to remain out of favor,” said First Marathon Securities Ltd. analyst John Lydall. “Lower real interest rates are required before many investors will again be prepared to look seriously at the gold market,” he said.

However, at American Barrick Resources’ (TSE) annual meeting in Toronto, Chairman Peter Munk promised to continue with plans to “uncouple the company from the vagaries of the gold market.” Proof that he is achieving his goals came in the form of record first-quarter earnings which climbed to 11 cents per share from 10 cents in the equivalent period in 1990.

Barrick shares were unchanged today at $22.63. Also unchanged were the A shares of Teck which has agreed to purchase four million shares of Prime Equities at $1.25, and warrants to purchase an additional six million shares at $1.25 to $3.25. In return, Teck can acquire 50% of any property interest held by Prime Equities. Teck B shares lost 13 cents to close at $22.63.

Among active gold stocks, the LAC issue dropped 13 cents to $8.88, while Placer Dome was even at $15.88.

As the A shares of Dickenson Mines hit a new low this week of $2.60, institutional shareholders were proposing that the Toronto gold miner be merged with parent Goldcorp Investments and affiliates Wharf Resources and United Coin Mines. The proposal comes from Angelside Inc., a company formed to represent institutional and other shareholders (including ex-director James McCartney) of the Dickenson group.

In other news, Denison Mines succeeded in selling for US$15.5 million its 12.6% stake in the Casablanca oilfield in the Mediterranean Sea off the cost of Spain. Still on the block are Denison’s oil properties in Greece, Egypt and Italy. While the sale earned Denison a reprieve on the $148.8 million it owes to the Toronto-Dominion Bank and Bank of America, it was achieved at a huge discount to the market price for oil. Denison’s A shares closed down 4 cents today at 66 cents.

Meanwhile the French parent of Vancouver-based Total Energold has elected to put its mining assets up for sale and stick to oil and gas exploration. As well as 51% of Plexus Resources and 49% of Tundra Gold, the company has assets in northern British Columbia, the Yukon, Timmins, Ont., and Quebec’s Casa Berardi area. Total shares were even today at $1.30.