STOCK MARKETS — Inflation fears limit TSE gains

Renewed inflation fears spooked investors and put a damper on the Toronto Stock Exchange over the 5-day report period ended Nov. 1. The composite 300 index edged up 21.68 points to end the week at 4,264.45.

A report out this week from the U.S. National Association of Purchasing and Management reported that its indexes of business conditions and prices-paid both surged during the month of October. Market analysts say these rising indexes point towards renewed inflation and ultimately higher interest rates. The Canadian dollar was off nearly half a cent on the week, closing at US73.72 cents. Relative stability in the money markets led to only a three-basis-point rise in the Bank of Canada rate to 5.65%.

Gold bullion continued to decline, with the London afternoon fix on Nov. 2 set at US$383.85 per oz., down US$5.05 from a week ago.

Senior gold producers all lost ground, with Hemlo Gold Mines off 25 cents to $14.38 and Echo Bay Mines down $1.25 to $16.25. Placer Dome was the big loser, having fallen $2.38 to $29.13 on a volume of just over 5 million shares.

Toronto-based American Barrick Resources intends to sell three mines and one development project which it acquired from former TSE-listed Lac Minerals. Bidding on the projects is expected to begin shortly, and management hopes the assets will be sold by the end of this year.

As well, Barrick surprised some analysts by posting higher-than-expected third-quarter earnings. The senior gold producer had net earnings of US$61.3 million for the quarter, compared with US$58.3 for the same period in 1993. Barrick shares shed $2 to close at $32.13.

An agreement-in-principal, in which the Royal Bank will extend a US$225-million credit facility to Montreal-based Cambior, has been approved. The company plans to use about US$100 million to refinance the existing gold loan at the Omai mine in Guyana. Shares of Cambior dropped $1.63 to close at $19.38.

Vancouver-based Orvana Minerals has entered a joint-venture agreement with Idaho-based MK Gold to explore for and develop mines in Kyrgyzstan. The partners have been granted exclusive rights to negotiate for two concession areas totaling 2,440 square miles. Orvana shares added 25 cents to end at $6. Cuban explorers also lost ground during the period, with Caribgold Resources hitting a new 52-week low of $2.15 (down 65 cents on the week) and Joutel Resources losing a nickel (to 40 cents).

Joutel’s price drop came despite encouraging news from three of its Cuban gold projects. At the Jaguey property near Camaguey, channel sampling has returned values of up to 0.42 oz. gold per ton over 36.1 ft. Investors responded well to news that Inco plans to spend $88.3 million on two projects in the Sudbury basin in Ontario.

At the Victor project on the East Range of the basin, the company is planning to spend $72 million to sink a shaft and carry out exploration drifting and 125,000 ft. of underground drilling. At presstime, preparations were under way to begin drilling the shaft pilot hole.

The company will spend $18.3 million to establish a new ore-handling system at the Creighton mine on the south side of the basin.

Shares of Brunswick Mining & Smelting touched a new 52-week high of $11.63 before losing ground, closing down 63 cents to end at $11. The base metal producer reported a profit of $600,000 for the third quarter in 1994, compared with an $11.6-million loss during the same period last year. News of a meeting between joint-venture partners Pure Gold Resources and Ashton Mining of Canada appears to have had a positive effect on Pure Gold’s stock. The meeting was scheduled to review results from the diamond prospects in the N.W.T. Ashton shares gained 3 cents to end at $1, while Pure Gold was up 18 cents at 34 cents.