What’s bad for the rest of the business community is not always bad for gold. The battered U.S. buck, which took a beating this week following increased worries about the burgeoning U.S. trade deficit, was the main catalyst behind the rally in gold prices. Bullion, which was sluggish during the last week of August, hopped $9 today to $466 (US).
Despite comments just last week by U.S. Trade Representative Clayton Yeutter that the dollar will not be used to curb the trade deficit, many analysts believe that’s just what Washington will have to do — let it slide even further. The end result can only be good for gold and gold shares.
The story was clearly spelled out in the tse gold and silver index, which rocketed to a new high of 10,269.16 pts — up 316.47 pts for the day. However, the weakened buck pushed the overall tse composite index down by a marginal 4.31 pts to 3,977.92 pts.
Placer Dome, which has become the proxy for gold bullion, traded a staggering 566,181 shares today for a value of $15.6 million. With liquidity l ike that, no wonder the issue is an institutional darling. Placer closed at $27.75. International Corona was also better at $41.38. Quarterly results from the company’s nine-month period showed earnings of $5.8 million or 39 cents per share excluding the Page-Williams mine at Hemlo. Add that mine, and earnings swell to $19.2 million or $1.28 per share. Parent company Royex Gold Mining, was also stronger at $5.38.
Budding gold miner Canamax Resources, was active at $12.50. Promising results keep coming from the company’s large land position around its developing Kremzar gold mine. Cominco Resources was also busy at $2.40 on volume of 256,980 shares today. The company could see gold production from a open pit heap leach project in Chile next year.
A full fledged nickel rally is being reflected in the share prices of nickel miners Inco Ltd and Falconbridge Ltd. Nickel, which for most of the 1980s, has been a dismal performer, is finally enjoying the fruits of record low inventory and growing demand for the metal. As a result, Inco was steady at $27 and Falconbridge at $27.25 — both prices near their 52-week highs.
High technology miner, Giant Bay Resources reports success from a bacterial leaching process for gold ores. Working in the N.W.T. on ore from a zone at the Salmita mine, the company reports excellent gold recovery results. The issue was steady at $2.70.
On the exploration scene, Golden Rule Resources was a high flyer trading 121,423 shares for the day. The issue advanced by more than a dollar to $4.50 for the week. The company and partner Goldsil Resources report high grade gold values in grab samples — up to 0.5 oz — from a property south of the Star Lake gold mine near La Ronge, Sask.
Kam-Kotia Mines moved into new-high territory on good volume. The issue, which was under $3 just two months ago, went through $4 to $4.10. Osler’s, a Toronto broker, has been a major buyer for the past month. Talk continues of a takeover bid for the company, which controls Dickenson Mines. Dickenson has some healthy gold reserves and production.
Golden Terrace Resources was up sharply at the opening bell to $1.95 before falling back to $1.63. Additional results from the company’s gold play east of Red Lake, Ont., yielded encouraging results. One of the better holes cut 15 ft grading 0.21 oz gold per ton. Several others were narrow and low grade in nature. Metalore Resources was active at $43 despite a report from partner Hudson Bay Gold that deep drilling on the company’s Brookbank project was very disappointing.
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