STOCK MARKETS — Rio/North offer tops Placer’s bid for Musto

Some analysts thought Placer Dome may have offered too much to acquire International Musto Explorations and a direct 50% interest in the Bajo de la Alumbrera copper-gold porphyry project in Argentina. What, then, do they think of the offer by Rio Algom and North Ltd., which tops the Placer bid by $2.49 per share?

Rio, a producer of copper and other metals, and North, a diversified resources company from Australia, are offering Musto shareholders $14.99 per share in a deal worth about $510 million. Rio, which slipped 63 cents to $25 during the report period ended April 25, says it can finance its share of the acquisition from existing cash.

First-quarter earnings for Rio rose significantly, thanks in large part to higher copper prices and increased copper production. The company’s Cerro Colorado project in Chile provided an additional 20 million lb. copper during a period when prices on the London Metal Exchange averaged US$1.33 per lb.

Meanwhile, directors of Musto, which had recommended that shareholders accept the Placer offer of $12.50 per share, now advise shareholders to await a new communication. Placer was off 38 cents on the week to $34.25, while Musto shares gained 25 cents to $12.88.

During the week, stock markets witnessed another record on Wall St., where the Dow Jones Industrial Average topped the 4,300-point level for the first time; it peaked at 4,303.98. In Toronto, the TSE 300 composite index (which peaked in March, 1994, at almost 4,610 points), slipped more than 2 points to close at 4,281.1.

Gold was unable to hold its price momentum and dropped US$6.55 per oz. on the week; the afternoon fix in London on April 26 was US$388.90 per oz. The TSE’s gold and precious metals sub-group also declined, by more than 152 points to 10,194.4.

Speaking of precious metals, silver has risen sharply of late, to the US$5.70-per-oz. range, helped by speculative buying in which commodity funds played a leading hand. If physical demand remains strong, the outlook is bullish for silver prices.

Copper futures prices, on the other hand, have dropped to the US$1.27-per-lb. range; inventories remain relatively low, but mining of the red metal and refining are expected to pick up during the second half of the year, placing more of the finished product on the market.

Off 30 cents on the week to $4.60 was Royal Oak Mines, which has bid for control of the Kemess copper-gold properties in north-central British Columbia. Royal Oak has offered to acquire VSE-listed El Condor Resources, which owns 60% of Kemess South and 100% of Kemess North; Royal Oak’s 39% owned subsidiary, Geddes Resources, has made an offer to take over St. Philips Resources, which owns the remaining 40% interest in Kemess South. The common shares of Geddes jumped 53 cents to $1.23, while company rights gained 6 cents to 7 cents on high volume. St. Philips slipped a dime to $2.35.

A proposed merger between Great Lakes Minerals and Geomaque Explorations is off; Geomaque directors voted against pursuing further discussions. Great Lakes, off 6 cents to $1.61, said in a press release that it was “disappointed” to learn of the decision. Geomaque slipped 4 cents to $1.35.

Noveder has entered an agreement to acquire all of Bitech Corp.’s rights, interests and royalties in the Nugget Pond gold property in Newfoundland for $1.2 million plus up to 4 million shares of Noveder. The junior also has negotiated joint-venture agreements with Bitech related to the latter’s Bett Cove and Tilt Cove properties near Nugget Pond. Noveder closed unchanged at 30 cents.

CDN-listed White Star Copper Mines says Falconbridge intends to begin drilling on the C Group property in Ontario’s Kidd Twp., some 3 km northwest of the latter’s Kidd Creek polymetallic mining complex. White Star last traded at 20 cents. Falconbridge, which has an option on the property, was off 75 cents to $22.63.