STOCK MARKETS — TSE composite index rises despite drop in

Although most major metal prices took a tumble, the Toronto Stock Exchange posted a moderate gain for the 5-day report period ended Aug. 2.

The composite 300 index jumped just more than 60 points, or about 1%, to end the period at 4,194.28.

Three of the four mineral-related subgroups were up, led by a 4.8% gain in the integrated mines sector to end at 4,156.72. The gold and precious metals subgroup was the odd one out, posting a 3.1% drop, to close at 9,302.07. Gold bullion also faltered, with the London afternoon gold fix at presstime on Aug. 3 set at US$378.45 per oz., down US$10.10 from a week ago. Most of the other major metals lost value, with the exception of copper which gained US1 cents to close at US1.10 cents per lb. Silver lost US11 cents to close at US$5.21 per oz.; platinum ended at US$414.50 per oz., down US$8.50; nickel closed at US$2.75 per lb., down US2 cents; while lead and zinc remained unchanged at US26 cents and US43 cents per lb., respectively. The Bank of Canada key rate fell to 5.70% on Aug. 2 from 6.04%. In response, the chartered banks trimmed their prime lending rates by a quarter of a point to 7.25%. Investor confidence in the long-term stability of the Canadian dollar helped lead to a reduction in both the prime and bank rates; this, despite the half-cent drop in the Canadian dollar which closed the week at US72 cents.

The list of suitors for control of beleaguered senior gold producer Lac Minerals continues to grow as TVX Gold and Kinross Gold jointly threw a hat into the ring. TVX and Kinross announced that they had entered into discussions with Lac’s management at about the time Lac’s former chairman, Peter Allen, resigned. The reported offer consisted of 0.9 Kinross shares and 1.22 TVX shares for each outstanding Lac share.

The TVX-Kinross offer, while having its supporters, appears to be ranked a close second by most analysts. The front runner still appears to be American Barrick, with Royal Oak rounding out the trio.

Most market players, however, are waiting to see whether any other offers are forthcoming.

Lac shares were up 13 cents to end at $14.38; TVX closed at $7.88, down 50 cents; Kinross lost 38 cents to finish at $4.38; Barrick dropped 63 cents to end at $30.88; and Royal Oak remained unchanged at $5.88.

An explosion at the Porgera gold mine in Papua New Guinea has left as many as 10 people dead, according to officials from Placer Dome. Operations at the mine, 25% owned by a Placer subsidiary, have been suspended, pending an investigation into the cause of the explosion. Shares of the senior producer were off $1 and closed at $28.13.

Other senior gold producers were also down. Echo Bay Mines was off $1 to finish at $15.25 and Hemlo Gold Mines lost 13 cents, to close at $13.13. On the diamond front, Aber Resources announced that it has recovered a total of 1,296 diamonds (402 being macrodiamonds) from a 750.8-kg drill core sample from the A-154 kimberlite. Aber has a 40% interest in the property and Repadre Capital has a 1% net smelter royalty on the property. More than 5.6 million shares changed hands as Aber’s stock shot up $2.25 to hit a new 52-week high of $14.25 before easing back to close at $14. Repadre shares also gained, up 45 cents to close at $3.90.

Results from another discovery in the Lac des Gras camp helped boost the share price of Adex Mining. A total of 180 diamonds, including 4 macros, were retrieved from a 230-kg drill core sample taken from the Nicholas Bay kimberlite. The sample was a composite sample from two holes, and results from a third hole are expected shortly. More than 3.3 million Adex shares traded as the stock rose 12 cents to close at 39 cents.

SouthernEra Resources, a company with an option to earn a 34% interest in the Nicholas Bay kimberlite, closed down 13 cents to end at $6.13. Investors seemed eager to buy Venezuelan gold stocks once again after share prices of these issues plummeted. More than 1 million shares in Vengold changed hands as the stock posted a moderate gain, rising 15 cents to end at $4.25.