STOCK MARKETS — Clinton victory ignites gold stocks; Cambior

Fuelled by higher third-quarter earnings and investor enthusiasm related to the U.S. presidential election, shares of many of the major mining companies posted healthy gains during the week ended Nov. 3.

Reflecting strength in the mining sector, The Toronto Stock Exchange’s gold and silver index surged by 155 points while the metals and minerals index picked up 35 points. Today (Nov. 4), metals and minerals gave up earlier gains with a 38-point slide.

According to a recent survey by the The Globe and Mail’s “Report on Business,” third-quarter profits in the mining group were up 237% from 1991 levels, partially as a result of a lower dollar and lower interest rates. Noranda, for example, reported third-quarter earnings of $26 million (6 cents per share) compared with a loss of $57 million (39 cents per share) during the same period last year. Cominco posted a $1.7-million profit, compared with a loss of $76,000.

Noranda gained 88 cents to $19.38 during the report period. Cominco picked up $1 to $20.38.

But the stellar performance of Canadian gold stocks had more to do with a change of government south of the border than with earnings or the gold price, said Mike Jalonen of Midland Walwyn. Gold edged up US$1.50 to US$339.25 per oz. in New York.

“People are excited by the Clinton victory and his plans to juice up the economy,” said Jalonen. He noted investors are loading up on gold stocks in the belief that President-Elect Bill Clinton will spend heavily to boost the economy, thereby fuelling inflation. Gold is considered a hedge against inflation.

Included in the winners’ circle were Placer Dome, up 88 cents to $15 after touching a 52-week high of $15.25; Lac Minerals, up 75 cents to $8.50 and American Barrick Resources, up $1.50 to $38. Amid post-election euphoria, Barrick added another 38 cents today to $38.38.

Soon to begin production at the Omai mine in Guyana, Cambior touched a new high of $11.75 as almost one million shares changed hands.

A group of gold analysts is currently visiting the property and the analysts are expected to return with positive reports on the new mine, Jalonen said. Cambior finished the week at $11.50 for a gain of 88 cents and was unchanged today.

With a 35% interest in Omai, Golden Star Resources gained 75 cents to $6.25. Even Echo Bay Mines, which touched a new 52-week low during the report period, managed to recover to $6.75. Echo Bay may be dropped from the TSE 35 index next year for failure to meet the index’s trading value limit of $100 million per year.

Pegasus Gold was one of the few losers, slipping 37 cents to $19.38. The company has cancelled its Ortiz joint venture in New Mexico with Lac and written off its US$19.2-million investment in the project against third-quarter earnings.

As reports of sampling and drilling results continued to pour in from the Lac de Gras, N.W.T., play, diamond stocks also had an active week. Trading a remarkable 11.4 million shares, Lytton Minerals touched a new high of 85 cents before settling at 66 cents for a gain of 6 cents. Today, Lytton added 12 cents to 78 cents. Partners Aber Resources and SouthernEra Resources gained 7 cents and 20 cents respectively after hitting seven kimberlites with eight holes on their Tenby claims. Aber picked up another 5 cents to $2.05 today, while SouthernEra remained unchanged at $1.95.

In the wake of a successful drilling program at its Tulsequah Chief zinc-copper property in British Columbia, Redfern Resources added a dime to $2.40. The company expects results from the program to boost known reserves of 8.6 million tons grading 6.5% zinc and 1.6% copper.

Minnova, which gained 25 cents to $16.25, Minnova recently increased its exposure in the far north by optioning two polymetallic properties in the Coronation Gulf area from VSE-listed Continental Pacific Resources. Minnova posted a third-quarter profit of $4.2 million, compared with $2.6 million last year.

In Quebec, Soquem has agreed to option three properties owned by ME-listed Societe D’Exploration Miniere Vior. By spending $2.35 million, Soquem can earn a 50% interest in the Joutel-area gold properties. Vior finished the week down one penny at 30 cents.