STOCK MARKETS — TSE balloon sinks back to earth

The Toronto Stock Exchange’s TSE 300 composite index at last broke 6,000, but, having vaulted that barrier, it lost momentum and finished the trading period Nov. 27-Dec. 3 at 5,940.73, down 34.83 points from a week before.

Golds held the spotlight as investors waited to hear the fate of the Busang deposit in Indonesia.

Volumes fluctuated widely over the week, with only 68 million shares trading on Nov. 28 — oddly enough, the same day the index closed at a record 6,018.65 — and 120 million changing hands on Dec. 3, not least because of heavy trading in issues with a Busang connection.

The Canadian dollar, which started the report period at US74.26 cents, was trading at US73.96 cents by noon on Dec. 4. The Loony followed its U.S.

counterpart higher against the European currencies, which were stung by weakness in the German mark and by rumors that British interest rates would be cut to depress the surging pound.

Gold fell sharply on Dec. 3, partly as a measure of the strength in the U.S.

dollar. The London bullion dealers’ morning ring on Dec. 4 fixed the yellow metal at US$370.40 per oz., off $3.55 from the week before. Silver was up, rising 9 cents to US$4.83 per oz. Platinum lost $5.25 to settle at US$372.50 per oz.

The TSE gold and precious minerals sub-index was off 580.16 points, about 5% of value, to finish the reporting period at 10,841.75. A number of issues fell in response to the weak gold price, but activity centred on the two behemoths that may be in a bidding war for the Busang deposit.

Barrick Gold was the most active on the exchange, seeing 18.5 million shares traded. The issue lost $1.15 to close at $37.85. Placer Dome was down $2.70 at $30.60, with 7 million shares moving. Meanwhile Bre-X Minerals fell $1.65 to close at $18.70, having traded as high as $21.65 and as low as $17.70.

Montreal-listed stablemate Bresea Resources was off $1.45 at $9.80.

Among other gold stocks, Teck B lost $2 to finish at $30.30, TVX Gold was unchanged at $9.60 in heavy trading, and Goldcorp fell $1.10 to close at $11.

The base metals had a difficult week, with copper at US$1.07 per lb. in the London morning ring on Dec. 4, down 6 cents from the previous week. Nickel was lower too, shedding 11 cents to finish at US$3.06. All the other base metals lost ground as well.

TSE base metal miners moved in lock-step with the broad market, falling 31.21 points to 5,432.83. The value loss of 0.5% neatly matched the decline in the TSE 300. Aur Resources, off 20 cents at $8.15, was the most heavily traded miner, with a volume of 5.9 million shares for the reporting period.

Falconbridge lost 5 cents to close at $30.70, Inco was up 35 cents to $46.65 and Noranda down 30 cents to $31.45.

Black Swan Gold Mines shares climbed 3 cents over the period, to 80 cents.

The stock led the TSE in trading volume, with 2.6 million shares crossing the floor. The company is intensifying efforts to outline the Cata Preta gold mine in Brazil.

By percentage, Augyva Mining fared worst among Montreal-listed resource companies over the week, dropping from 15 cents to 7 cents. The company is exploring for gold in the James Bay region of Quebec.

J.A.G. Mines, which holds gold, molybdenum and silica properties in Quebec, lost 75 cents, dropping to $2.45 from $3.20. The company is combing the bottom of the Ottawa River near the Royal Canadian Mint in search of gold and silver.

World Wide Minerals lost 22% of its stock value over the period, dropping to $1.40 from $1.80. World Wide, which is exploring for gold in Kazakstan and China, is set to merge with Kazakstan Goldfields by acquiring 7 million shares of that company from Central Asia Goldfields for 6.6 million World Wide shares.

Rea Gold saw the value of its stock drop 22% over the period, to $1.70 from $2.18. A group of mining analysts recently visited Rea’s San Gregorio gold property in Uruguay.