STOCK MARKETS — Market slides but gold stocks catch a wave

The Toronto Stock Exchange saw most of last week’s moderate gain slip away, as market participants remained edgy on conflicting economic news. For the 5-day report period ended Aug. 15, the TSE 300 composite closed at 4,593.27, down 28.47 points.

The Bank of Canada set its trend-setting rate down two basis points to 6.82%. This may well be the calm before the storm, as rates are expected to become more volatile as the Quebec referendum draws near. Meanwhile, the Canadian dollar lost ground, down US0.13 cents to close at US73.53 cents.

The gold-and-precious-metals sub-index bucked the market’s prevailing sentiment and rose 258.69 points (or 2.4%) to 10,979.16. The index was up strongly, despite a negligible drop in the price of the yellow metal. The London morning gold fix on Aug. 16 was US$384.10 per oz., down US$0.40 on the week. The fix for platinum was also lower, dropping US$2.05 to US$420.70 per oz., while the silver fix jumped US7 cents and closed at US$5.36 per oz.

Among senior gold miners, Placer Dome was up sharply, adding $1.25 to close at $36.50. Barrick Gold was up 75 cents at $35.63 and Echo Bay, which gained solidly last week, gained 38 cents more to finish the week at $14.88. Hemlo Gold, which was unchanged at $14.25, announced it has formed a joint venture with Orvana Minerals to explore a property in northern Chile. Orvana tacked on 5 cents to close at $4.95.

The metals and minerals sub-index lost 32.60, finishing the week at 4,961.37 despite continued strength in the major base metal prices and senior producers.

London Metals Exchange prices for copper and nickel continued to forge ahead this week. The price of copper added US2 cents to close at US$1.39 per lb., while nickel jumped US6 cents to end at US$4.09 per lb.

Noranda’s proposal to take over subsidiary Brunswick Mining & Smelting continues to go smoothly. Brunswick’s board of directors flashed a green light late last week for the proposed swap of one Noranda share for two Brunswick shares, plus a 65 cents dividend on Brunswick shares. Since then, Brunswick’s shares have tracked Noranda’s price closely, and trading in Brunswick is much lighter than in recent weeks. Noranda closed Tuesday at $28.50, down 50 cents, while Brunswick settled at $14.63, down 38 cents.

The week saw the closure of a deal involving the sale of a 28.3% interest in nickel producer Falconbridge by Swedish-based Trelleborg to a group of Canadian underwriters. The underwriters bought the 50 million shares at a price of $28.75 per share. Falconbridge shares closed on the market a shade lower than the deal price, ending at $27.50, for a gain of 25 cents on the week.

Montreal-listed Bresea Resources had pleasant news when its 24%-owned affiliate, Alberta-listed Bre-X Minerals, reported further drill results from the Busang project in Indonesia. Bresea closed 63 cents higher at $14.13.

Black Hawk Mining traded heavily this week and advanced 8 cents to 93 cents. Black Hawk has discovered more mineralization in four of six stepout drill holes at its prospect in Hoyle Twp. near Timmins, Ont. Gold has now been discovered over a 250-metre strike length, to a depth of 200 metres.

Junior explorer International Gold Resources announced the results of a feasibility study on its Bibiani deposit in Ghana’s Birimian gold belt. The study indicates that Bibiani could produce 1.3 million oz. gold in the first 6.5 years of operation, including 300,000 oz. in the first year and 200,000 oz. in each of the following two years. Despite the good news, the stock lost 20 cents to close at $4.80.

Vancouver-based International Capri purchased a 42% interest in the Baffin Island claims of Continental Precious Minerals by issuing Continental over 1.1 million of its shares. Shares of Continental Precious Minerals gained 55 cents to hit a new high of $3.55.