STOCK MARKETS — Flatness of TSE reflects static bullion

Another quiet week for gold bullion prices — the spot price hovered for most of the week at about US$371 per oz. — was also reflected in a flat Toronto Stock Exchange gold and silver index. It ended our report week on Aug. 31 at 9,585.23, down fewer than 100 points from the Aug. 25 close.

While the gold and silver index remained flat, the overall market indicator, the TSE 300 composite index held near its record close of 4,137.55 on August 30. It had slipped by 1.21 points at the end of our report period, Aug. 31.

And, of course, a quiet week in the bullion market left most of the major gold equities virtually unchanged. American Barrick Resources lost 50 cents, closing at $33.75; Hemlo Gold lost 12 cents to close at $14; Pegasus Gold was down $1 to $31.12; and Echo Bay remained flat at $15.62.

Fighting the trend were Franco Nevada, which gained more than $2 rising to $73.37 (Sept. 1). It was in the news recently because of a million-share financing to raise $75 million. It also acquired a net smelter return in the Dee mine in Nevada.

Placer Dome was livelier as well, gaining nearly $1 to close at $28.25. Lac Minerals gained ground too, rising 62 cents to close at $12.25. Agnico Eagle gained 50 cents, closing at $17.

Also in the news was Cambior. Once again its Omai mine (owned in part by Golden Star) has proved a winner — reserves have climbed by 20%. Proven and probable reserves now stand at 55 million tons versus 45 million before the recent upgrade.

Out of the Timmins camp, meanwhile, came encouraging reports from both the Kidd Creek mine and the Dome mine. At Kidd Creek, reserves are rising (see page one). This is especially good to hear because the official reserve, as it stands now, would result in the mine closing by 2004.

At the Dome, talk of the “super pit” has become a bit more than just talk. Officials are reporting that plans should be made final later this year. In this space last week, we said we had heard Richmont Mines was on the verge of closing a deal to buy the Camflo mill, a few miles down the road from Richmont’s Francoeur mine in Rouyn/Noranda. The ink on that issue of The Northern Miner had hardly dried when an official release came across the wire confirming the deal. Richmont closed up 20 cents at $4.80.

Across the Quebec border, we’ve heard rumors that Inco is more than a little excited about a surface showing of not nickel nor gold but copper/zinc. This week, the grapevine has it that Inco has staked more than 1,000 claims in and around Clairy Twp., 130 km. north of Chibougamau, Que. A couple of weeks ago, we reported Fort Knox Gold had staked some 200 claims in that same township. Fort Knox is an Inco subsidiary. We should mention that we haven’t been able to confirm the rumors with Inco.

Rumors have also been circulating that both Metall Mining and Noranda had been drawn to the area by the excitement generated by Inco’s work. However, phone calls to officials at both companies drew negative responses. In the stock market, Inco took a drubbing, largely because of lacklustre base metal prices. The company dropped $1.50 to close at $27.50. Noranda was virtually stalled at $22.62 while the other major base metal miner, Cominco, gained ever so slightly, to close at $16.25.

The generally lifeless activity in gold and base metals was also a feature of the diamond stocks. Dia Met, for example, held steady at $47 while Aber Resources was down 5 cents on the week to close at $3.40. SouthernEra Resources shed 25 cents, closing at $6.50. This market desperately needs good news.