MINING MARKET & INVESTMENT NEWS — EASTERN MARKETS — Broad market takes hit as metal prices improve

Growing concern of another interest rate hike south of the border crossed over to the Toronto Stock Exchange, causing the TSE’s 300 index to plunge 198.99 points during the report period Aug. 25-31. The index ended the period at 6,970.81.

Gold regained some composure after the lashing it received in the previous period, rising US$2.25 to trade at a London morning fix of US$255.45 per oz. on the morning of Sept. 1. Silver also gained ground, rising US11 cents to US$5.20 per oz., as did platinum and palladium, up US$1.75 per oz. and US50 cents per oz., respectively.

The TSE’s gold and previous metals sub-group climbed 42.16 points, ending the period at 5,177.43. Leading the way was Barrick Gold, which rose 70 cents to $28.80. Also making gains were: Placer Dome, up 10 cents to $15.50; Kinross Gold, up 4 cents to $3.20; Euro-Nevada Mining, up 25 cents to $17.95; and Franco-Nevada Mining, up 30 cents to $23.50.

TVX Gold lost 9 cents to end the period at $1.18. The producer, fresh from settling an amicable business arrangement with Australian major Normandy Mining, now finds itself mired in a new lawsuit over its Kassandra gold mines in Greece. This time, however, TVX has sided with the plaintiff, which alleges a breach against the same group of investors that, in 1998, won a 24% stake in the mine using a similar argument against TVX.

Junior Birim Goldfields found itself the subject of a takeover attempt by Golden Star Resources, which has offered the company’s shareholders 40 cents for each share held. The news pushed up Birim 12 cents to 30 cents and Golden Star, 10 cents to 80 cents.

Despite stronger metals prices, the Toronto Stock Exchange metals and minerals sub-index fell 196.18 points to 4,049.47 points. Nickel rose US8 cents per lb. over the period, finishing at US$3.11 per lb., while lead gained a penny, and copper and nickel, twice that.

Inco fell $1.50 to $30.65. On Sept. 15, employees at the company’s Manitoba operations entered a legal strike position, and negotiations are reportedly not going well.

Negative news hurt Rio Algom, which announced it will take a $214-million after-tax hit against third-quarter earnings to reflect writedowns on the carrying values of several projects. The major ended the period at $22.75, a loss of $1.05.

Agnico-Eagle Mines and Noranda finally settled a lawsuit undertaken by the latter in 1987. The $40-million claim arose from Noranda’s sale to Agnico-Eagle in 1986 of its interest in Dumagami Mines (since merged with Agnico-Eagle), which had as its principal asset the Laronde mine in northwestern Quebec. In the settlement, Agnico-Eagle will pay Noranda $1.9 million within one year. Agnico settled down 65 cents to $9, whereas Noranda was off $1.85 to $20.15.