STOCK MARKETS — Higher bond yields drag down TSE

Strengthening bond markets had a negative impact on the Toronto Stock Exchange over the 5-day reporting period ended Oct. 25. The composite 300 index dropped 73.19 points to end the week at 4,242.77.

Market analysts are worried that higher bond yields could lure investors from stocks and also reduce corporate profits.

A stronger Canadian bond market helped propel the Canadian dollar to US74.14 cents, up more than a quarter of a cent from a week ago. Stability in the dollar allowed the Bank of Canada to lower the bank rate by 0.09% to 5.62%. Gold bullion declined, with the London afternoon fix on Oct. 26 set at US$388.90, down US$2.20 from a week ago.

Senior gold producers failed to gain ground, with American Barrick Resources down 25 cents to $34.13; Hemlo Gold Mines off 13 cents to $14.63; Placer Dome down 25 cents to $31.50; and Echo Bay Mines unchanged at $17.50. At presstime, Barrick announced that it would be disposing of certain assets acquired from the Lac takeover. These include the Macassa and Golden Patricia mines in Ontario, the Bullfrog mine in Nevada and the Red Mountain gold project in B.C.

Junior gold miner Wheaton River Minerals reports that a hole drilled into the Ursa deposit, near the Golden Bear Mine in British Columbia, has returned a spectacular intersection grading 12.2 grams per tonne across a true width of 27.2 metres. The hole was the last in a 12-hole program, and a second phase is planned for next summer.

All mineralization encountered to date in the Ursa Zone is oxidized, and should be amenable to heap leaching. Despite the good news, Wheaton lost 11 cents to close at $1.89.

Strong earnings during the third quarter helped bolster the share price of Noranda this week. The natural resources conglomerate reported a $78-million profit for the quarter on revenues of $1.8 billion, compared with an $8 million loss on revenues of $1.3 billion in the same period in 1993. Shares of Noranda rose 50 cents to close at $26.38.

A positive report by Nesbitt Burns helped shares of Cameco post a gain on the week. The report stated that western world consumption of uranium would exceed supply by more than 40%, thereby leading to higher uranium prices and lower inventories. Almost 1.8 million shares changed hands as Cameco rose 75 cents to close at $28.75.

Recent drill results and news of a planned feasibility study, to be completed at USMX’s Dewey deposit in the Thunder Lake area of central Idaho, failed to spark much interest. Results from the drilling were as high as 0.983 oz. over 80 ft., but typically ranged between 0.06 oz. and 0.13 oz. over 50 ft. to 180 ft. USMX did not trade with a bid/ask range of $4.50 to $5.13. Australian explorer Tri Origin Exploration announced it has completed a review of all geological data and believes that there is a large, as yet untested, area on the company’s Lewis Ponds property in New South Wales that could host mineralization. Tri Origin will drill the area over the next two months to assess the potential. Shares of the company were down 5 cents, hitting a new 52-week low of $1.

Montreal-listed Virginia Gold Mines inked an option deal with Kennecott concerning Virginia’s copper-gold-uranium SAGAR-III and Romanet properties in the Labrador Trough region of Quebec. Under the terms of the deal, Kennecott must spend $3 million over a 5-year period to earn a 50% interest. Kennecott has an option to earn an additional 1% by preparing a feasibility study. Virginia shares were unchanged at 55 cents.

Joint venture partners Bethlehem Resources and Dejour Mines announced drill results from their El Dorado project, also 50%-owned by Vancouver-listed Mirage. Drill results from in and around the workings of the past producing mine in El Salvador were as high as 13.6 grams gold and 120.1 grams silver per tonne over 24.9 metres. Bethlehem added 13 cents to close at 53 cents, while Dejour remained unchanged at 17 cents.