STOCK MARKETS — Gold and metal stocks help lift TSE

Stronger share prices in the gold and metals sectors helped the Toronto Stock Exchange post a modest gain over the 5-day report period ended Nov. 22. The composite 300 index rose 45.57 points to close at 4,103.72. This marks the first week in nearly a month that the TSE has posted a healthy gain.

Market-watchers are anticipating a jump in the prime rate, following the decision by the Bank of Canada to raise the bank rate by eight basis points to 6.04%. After five consecutive weekly increases, the central bank rate has reached the same level as in late July.

Most analysts are predicting at least a half-point increase in the prime to 7.5%.

The higher bank rate failed to help the Canadian dollar, which continued to fall by more than a quarter of a cent to close at US72.54 cents. Gold bullion prices continued to slide, with the London afternoon fix on Nov. 30 set at US$383.10, down US$1.60 from a week ago.

Despite the late-week rally in the gold sector, most senior gold producers were quiet on the week, with Echo Bay Mines unchanged at $14.75 and Hemlo Gold Mines off 38 cents to $13.13.

A potentially significant gold discovery by Placer Dome has triggered a flurry of interest in Costa Rica.

The discovery of a near-surface, volcanic-hosted, epithermal system within the Sarapiqui mineral belt has led others, including American Barrick Resources, to acquire prospective ground in the area. Placer’s Cerro Crucitas discovery lies within a 30,000-hectare property and came about as a result of a $1-million exploration program that included 3,000 metres of drilling. For its part, Barrick has optioned properties totaling 300 sq. km near the Placer find. Each property is in the early stage of exploration. Shares of both Placer and Barrick were unchanged at $26.63 and $29.63, respectively. Other companies operating in Costa Rica include Lyon Lake Minerals and Ariel Resources. Lyon owns the 19-sq.-km Beta Vargas property, which hosts probable and possible reserves of 1.7 million tonnes averaging 0.04 oz. gold per ton. The project is scheduled to start production in the first quarter of 1995. Lyon Lake was unchanged at 30 cents.

Ariel, newly listed on Toronto, is completing a public offering. Funds raised will be used to explore and develop properties in Costa Rica. Currently, Ariel operates the Esperanza and Tres Hermanos properties.

A failure to proceed with the proposed merger among Granges, Dakota Mining, Hycroft Resources & Development and Atlas had a negative effect on the three Toronto-listed stocks. Dakota lost the most, shedding 32 cents to close at $1.68, while Granges closed at $1.95, off 28 cents, and Hycroft ended at $2.21, down 21 cents.

After selling the interest in September, Metall Mining announced it would reacquire the 35% interest in Europe’s largest custom copper smelter, Norddeutsche Affinerie AG (NA), for US$152 million. Last September, Metall sold its share to former parent company Metallgesellschaft by way of a public offering.

Metall has also confirmed that it will close its Copper Range smelter in Michigan early next year. The closure is being carried out to conform to emission limits and speed up construction of a modified plant. Metall shares were up 13 cents to finish at $11.63.

Elsewhere on Michigan’s Keweenaw Peninsula, Vancouver-listed Brookline Minerals has signed a deal to develop jointly Great Lakes Minerals’ 543-S copper property. Under the deal, Brookline will fund all production costs, which are estimated at $5.5 million. The proceeds of production will be split 75%-25% between Brookline and Great Lakes — until payback, after which the proceeds will be split 50-50.

The 543-S property hosts minable reserves of 1.1 million tons grading 4% copper. Great Lakes closed up 8 cents to $1.98, while Brookline was unchanged at 36 cents.

A number of companies are preparing to bid on the Lac assets being sold by American Barrick, either on their own or by forming alliances with other groups. Richmont Mines is making no secret of its interest in the Macassa mine in Kirkland Lake, for example. The company lost 10 cents on the week to finish at $3.70.