STOCK MARKETS — Golds gain, diamonds slip on Toronto

Before you delve into this report, glance down at the table on this page called “Greatest Value Traded, Nov. 3-9.” In the left-hand column please note that eight of the 10 big-value traders during our report week were gold companies (Teck qualifies by virtue of its Hemlo holdings). Now, glance at the right-hand column in the same table. All the stocks (even Noranda’s) moved up. That’s pretty clear evidence that gold bullion is at it again, confounding the heavy sellers at the Bank of Canada whose gold vaults from a decade-long liquidation are now nearly empty. In fact, gold scaled back up to US$375.50 by Nov. 10, a solid US$12.50-per-oz. gain over our report week.

(Rumors that super-investor George Soros was again favoring gold are said to have spurred the market.)

There’s no doubt this latest display of strength will either sideline or convert a few more gold skeptics — a good thing, too, if author Timothy Green is right. (His completely updated The World of Gold is now available.) According to Green, a dispassionate observer and keen student of the market since 1966, it may be painful — financially speaking — to stand in the way of this golden juggernaut. In an interview with The Northern Miner (to be published next week), he maintains the fundamentals are in place for a sustained bull market in gold. He cautioned, however, that volatility will be a hallmark.

The volatility this week was on the upside. American Barrick gained $1.63 to $35.75; the royalty twins — Euro Nevada and Franco Nevada — climbed higher yet, Euro to $42 (up $2.63) and Franco to $82 (up $5). Both Pegasus Gold and Placer Dome gained an identical $1.63, with Pegasus closing at $28.50 and Placer at $32. The latter is thinking about going deeper for ore at Campbell Red Lake (see front page), which would be extremely good news for the aging, but still fertile, camp.

Hemlo was up 63 cents to $13.75 while TVX Gold gained nearly a dollar to $8.25.

Lac Minerals, after a couple of weeks of lagging performance, began moving up to close at $10.63, up more than a dollar.

Meanwhile, in the news was Goldex Mines. Its board of directors approved the proposed amalgamation with Agnico Eagle, on the basis that Goldex shareholders will receive 0.36 Agnico shares for each Goldex share held. Goldex gained 75 cents during the report week, closing at $7.25. A few short weeks ago, the stock was trading in the $5 range. Agnico Eagle rose $1 to $20. Following on the heels of its split with Arimetco, Breakwater Resources traded a phenomenal 14 million shares this past week. It doubled in price to close at 21 cents during the report week. Share prices had retreated by presstime (Nov. 10) to 15 cents. A phone call to Breakwater CEO Garth MacRae cast little light on the huge volume and price moves.

“We’ve changed the board (of directors),” he said. “We’ve advanced the operation some money. But beyond that I can’t say why the market’s moving.” As he had declared earlier, former Breakwater shareholder Roy Shipes was in the market selling portions of his 22-million-share Breakwater holding. Breakwater has about 140 million shares outstanding.

There was nothing upbeat in the base metals sector, yet Noranda gained half a dollar. This came in spite of its reporting a third-quarter loss of $10 million. It closed the week at $23.

On the diamond front, there was a slight weakening on the Toronto-listed side. For example, SouthernEra fell more than 50 cents to close at $5.13. Lytton was off a dime to $3.85, while the “senior” of the group, Dia Met, shed $1.25 closing at just a shade above $45.