STOCK MARKETS — TSE composite index edges over former high

The story of the week has been the Toronto Stock Exchange Composite Index and its bid to hit a new all-time high. On Aug. 23, it went through the 4,100 level and looked hellbent for leather to beat the record close of 4,112.86 hit Aug. 13, 1987. By Aug. 24, it actually surpassed the 1987 record during the trading day, but it couldn’t hold the level until the close. The very next day, however, the index eclipsed the 1987 record, closing at 4122.92.

Before breaking out in cheers, though, consider the index that captivates us — gold and silver. It didn’t threaten any records. It closed Aug. 24 at 9,575.93. The static behavior of gold prices, naturally, affected the index. Gold drifted in a narrow range around US$372 per oz. The fact that it did not drop below $370 was a good sign.

And some of the senior gold stocks responded. For example, Franco Nevada gained $2 during our report week to close Aug. 24 at $71.25. American Barrick rose nearly $2, closing at $34.25; Lac Minerals gained half a dollar to just a shade under $12; Placer Dome moved nearly $2 to $27.75. For all these stocks, it’s difficult to find any corporate developments to account for increases. Could it be the gold equities are signalling another runup in bullion prices?

Unlike the other majors, Agnico Eagle did have something to crow about — its new Zone 20 at the La Ronde. This mine, by the way, since its inception in the late 1980s, has been a stellar performer for Agnico. (Please see the Zone 20 story on page 11.) Not only do new zones keep popping up, but the current workings are yielding record results.

Among the more junior issues, Agnico affiliate Mentor Exploration gained 50 cents to close at $5, only 25 cents under its 12-month high. Turning to the grapevine, we’ve learned that Richmont Mines is acquiring the 1,400-ton-per-day Camflo mill near Malartic, Que. Readers may recall Richmont’s share price rose impressively earlier this year on the coattails of the gold price. A story in The Northern Miner noted that the hallmark of the company is unspectacular but steady growth. The mill acquisition nicely illustrates this approach.

Richmont’s sole mine — the Francoeur — is slated to produce 200,000 tons by 1994. But the Camflo mill has annual capacity of 500,000 tonnes. It’s a relatively safe bet that Jean Guy Rivard, the brains behind Richmont, already is sniffing the wind from his Rouyn-Noranda base for new gold projects or, at the least, custom-milling opportunities. One way or another, the surplus capacity will be utilized. And, of course, Rivard will have to rely no longer on custom mills for his own ore.

Also rumored is a story that Aur Resources has confirmed the grades at its Louvicourt property. As well, what were once formerly considered waste blocks have been included in the ore category and the orebody is said to open downdip. Good stuff, if it’s true.

Eden Rock Minerals, a junior explorer, jumped 48 cents to close at $3.30. The company is exploring an interesting auriferous structure in Ivory Coast, a country on the west coast of Africa which has joined the now-crowded club of developing nations luring Canadian companies.

Azco Mining, with its Arizona copper project, moved up 65 cents, to close at $4.10. Azco won glowing comments from Gordon Capital analyst John Warwick, who suggested it is still trading below its net asset value (per share) of $4.75. That comment alone might have propelled the stock.

Another modest gainer among the junior non-golds was Tiomin Resources, a company with a heavy mineral sands deposit in Quebec and a heavyweight board of directors (Pierre Lassonde of Franco and Euro Nevada; Ian Telfer, formerly with TVX and now with VenGold; Oliver Lennox King; and mining analyst Jean-Charles Potvin). Tiomin jumped another 10 cents to close at $2.45. It’s been bouncing around in this range for a few weeks now.

The company has scheduled a tour this fall of its deposit site and the Quebec City processing facility.