Stock Markets — Base metal stocks rise in generally quiet market

The Toronto Stock Exchange moved in a very narrow range during the report week ended Aug. 23, and on comparatively little economic news. The TSE 300 composite finished the period at 4601.68, a gain of 8.41 points or 0.2% on the week.

Canadian interest rates were down slightly for the third week in a row. The bank rate, set at 25 basis points above the average yield on 90-day treasury bills, was pegged at 6.7% after Tuesday’s T-bill auction. Firmness in the Canadian dollar, which was off only fractionally against the U.S. dollar and stronger against other currencies, has allowed the rate to ease. Low inflation rates led most analysts to expect a short-term easing of the bank rate.

The U.S. Federal Reserve Bank held its bank rate at 5.75% in response to the U.S. dollar’s continued strength against the Deutschmark and other European currencies.

TSE gold stocks were down slightly after a strong performance in the previous week. The gold-and-precious-metals subindex lost 152.68 points, to close Aug. 22 at 10826.48, down 1.4% on the week. Cambior was hit hard when news of a spill at its Omai gold mine in Guyana reached the market. It closed Aug. 21 at $14.25, down $4.12 from the previous day’s close, then rebounded 38 cents on Aug. 22 following a buy signal from some brokerage houses. Tuesday’s closing price of $14.63 was $3.50 lower than the previous week’s. At presstime, Cambior was trading at $14.63. Golden Star Resources, minority owner of the Omai mine, was down $1.50 on the week, to close at $7.38.

Other gold stocks retreated slightly, with Placer Dome down 25 cents to $36.25; Barrick Gold off 63 cents to $35; Echo Bay shedding 12 cents to $14.75; and Kinross losing 25 cents to close the week at $11.25.

The TSE metals and minerals index was stronger, posting a gain of 277.97 points or 5.3% on the week and closing at 5239.34. Base metal issues traded heavily on the week.

Three of the four big base metals — copper, lead and nickel — posted price advances on the London Metal Exchange (LME) spot market for the period ended Aug. 22. Strength in the market prices for nickel, which traded at $4.14 per lb. on the LME, translated into new 52-week highs for Inco, Falconbridge and refiner Sherritt.

Inco vaulted $3.25 to close at $50.63, having touched $51.25 during the week in heavy trading. Falconbridge traded as high as $30.25 before closing at $30.12 for a gain of $2.63 on a volume of 6.1 million shares. Sherritt was up $1.12 on the week, closing at $16.63 and making a new high of $16.75.

Producers of other base metals also made strong gains. Noranda closed at $29.75, up $1.25, and Rio Algom posted the same gain, to finish the week at $29.63. Cominco’s common shares and Teck’s A series also made the $1.25 club, closing at $28.75 and $27.25, respectively. Lead-zinc producer Brunswick Mining & Smelting closed at a 52-week high of $15.25, up 63 cents.

Geddes Resources took on 43 cents and closed at $1.40 on the news that heavyweight Royal Oak Mines had offered to exchange Royal Oak shares for the 61% of Geddes it does not already own. The British Columbia government settled on a $26-million compensation package, to be shared by Geddes and Royal Oak, for having canceled the Windy Craggy copper project two years ago Also in the picture were St. Philips Resources and Vancouver-listed El Condor Resources. Together, they control the Kemess North and South gold deposits, which Royal Oak will be developing. St. Philips added 55 cents to close at $3.15 and El Condor jumped $1.50 to $6.25 in anticipation of a share exchange from Royal Oak. Royal Oak gained 50 cents to finish at $5.12.

Northgate Exploration announced earnings of 14 cents per share for the six months ended June 30, and added 20 cents to close at $1.36.

Among juniors, St. Genevieve Resources announced the acquisition of a Russian property and favorable results from its property in Guinea, West Africa. Shares of St. Genevieve were up 6 cents on heavy trading. San Andreas Resources announced drill results from its Prairie Creek zinc-lead-silver deposit in the Northwest Territories and tacked on 30 cents to $1.55.