MINING MARKETS & INVESTMENT NEWS – EASTERN MARKETS — Goldcorp gains on news of major financing (January 11, 1999)

The new year saw the triumphant birth of the euro, the new currency that will be used by 11 countries of the European Union, with the notable exception of Britain.

During the Dec. 29-Jan. 5 report period, the American dollar, which showed such strength during the Asian Crisis, finally showed some weakness against the world’s major currencies, including a newly buoyant yen. While the greenback slipped 4.1 cents (Canadian) against the loony between Dec. 29 and Jan. 6, gold prices did not show much of a rally, rising only 45 cents to US$287.15 per oz. on the London morning fix of Jan. 6.

In keeping with gold’s sluggishness, most of Canada’s major gold miners showed little movement throughout the week: Barrick Gold was down 10 cents to $29.60; Placer Dome kept dropping, this time by 15 cents to $17.45; Kinross Gold was up 6 cents to $3.56; Cambior rose 75 cents to $8.05; TVX Gold slipped 5 cents to $2.70; Franco-Nevada Mining gained 40 cents to reach $30.30; and Euro-Nevada Mining rose 35 cents to $25.25.

Royal Oak Mines continued its downward spiral, falling 6 cents to 39 cents in the wake of last week’s news that it was suspending debt payments till mid-February, when the company must make an US$11-million payment to holders of US$175 million in senior subordinated notes.

Volume leader William Resources ended the period unchanged at 6 cents, up 2 cents up from its all-time low reached in mid-December, when the miner sank deeper into the abyss by defaulting on three loans attached to its two gold mines in Brazil and Sweden.

Goldcorp saw its class A shares soar 45 cents to $8.75 on news of a planned expansion at the company’s Red Lake mine in northwestern Ontario. Three Canadian banks will provide US$60 million for the program, and they have demanded Goldcorp hedge three-quarters of its next five years of production from the Warf gold mine in South Dakota.

Nickel miners recorded gains as the spot price for nickel jumped 4 cents to US$1.80 per lb. Inco shot up 60 cents to $16.25; Falconbridge rose $1.20 to $17.20; and Sherritt International climbed 20 cents to $3.

Among other base metal miners, Noranda rose $1.30 to $16.75, Teck’s B shares climbed 55 cents to $11.55, and Rio Algom lost 50 cents to fall to $16.50.

Montreal-listed junior Cancor Mines rose 7 cents to 37 cents as the company raised nearly $1 million in a private placement. Of that amount, $790,000 will be used to explore the Gemini polymetallic property in Quebec’s Abitibi region. Cancor is compiling the results of a geophysical program from Gemini’s Discovery zone.