STOCK MARKETS — TSE listless despite gold, base metals

Last week’s gains in base metals prices continued, but these were outshone by gains made by precious metals.

Commodity prices, however, had little effect on the Toronto Exchange Stock composite 300 index, which gained a meager 17 points to close at 4,286.98 for the week ending May 24.

The Bank of Canada rate edged downward by 14 basis points to 6.31% on May 24. In response, the Canadian dollar also moved lower, to close at US73.53 cents, down 12 cents from May 23.

Rising copper and nickel prices helped the mines and metals subgroup gain more than 40 points to finish at 3,747.50.

The gold and silver subgroup jumped more than 500 points (or over 5%) to end at 10,137.66. The London afternoon gold fix on May 25 was US$387.30, up $6.70 from the previous week.

The recent spike in the price of gold helped the senior producers improve. American Barrick jumped $2.13 to close at $33.75; Placer Dome, also a big mover, rose $1.63 to end at $31.37; Echo Bay gained 75 cents to finish at $15.37; while Lac Minerals was up 50 cents and Hemlo Gold Mines added 25 cents to finish at $12.13 and $12.63, respectively.

Junior golds generally followed the rising trend. Sudbury Contact rose $1 over the week to finish at $7. The company is starting the second phase of drilling on the Victoria Creek gold project near Larder Lake, Ont. At its annual meeting in Toronto, Rayrock Yellowknife Resources outlined exploration and development plans for the Dee gold mine in Nevada. The shares of the junior producer gained $1 to close at $19.37.

Royal Oak edged upward to finish at $5.75, a gain of 37 cents on the week. Shares of Kinross Gold took a bit of a break this week after rising for the past few weeks. Kinross lost 25 cents to close at $7.

Golden Star Resources moved up 25 cents on the week to close at $18.88. The company is allowing Cambior to earn a half interest in the Yaou-Dorlin gold project in French Guiana. Cambior was a big winner during the week, gaining $1.50 to close at $19.38.

Since Lac Minerals moved into the Fort MacKay gold play in northern Alberta, little news has come out of the area. Despite trading more than 640,000 shares, NSR Resources remained unchanged at $1.60, while sister company Tintina Mines tacked on 25 cents to close at $3.05.

Royalty companies were up over the reporting period, with Franco-Nevada Mining gaining $6 to $79.75, Euro-Nevada Mining tacking on $3 to $40, and Repadre Capital adding 10 cents to $4.25.

This week, Repadre announced it had completed the purchase of a royalty on gold production from the Limon-India mining operation in Nicaragua. The most active issue on the week was MVP Capital, which was up a penny to 9 cents on a volume of more than 4.1 million shares.

The continuing rallies in the copper and nickel markets helped senior base metal issues. Noranda jumped 50 cents to close at $27.25, while Cominco edged up 37 cents to close the week at $23.37. The B shares of Teck continued to make impressive gains, adding $1.12 to end the week at $25.75, while Rio Algom gained 25 cents to close at $25.37.

Nickel giant Inco tacked on $1.25 to close at $37. The company recently appeared on a list of possible acquisition targets distributed by New York brokerage firm Paine Webber. A PaineWebber spokesman says Inco is a potential target because its stock price is well below replacement cost. Despite encouraging exploration news and some significant developments, many of the diamond issues lost ground on the week. Montreal-listed KWG Resources was off 20 cents to $3.15 on a volume of 567,000 shares. The drop comes after the company announced that new kimberlites had been found on its Attawapiskat River property in the James Bay Lowlands of Ontario. Ashton Mining of Canada, which has an option to earn-in on KWG’s project, lost 9 cents to close at $2.11.

Diamond Fields Resources was the big loser, dropping 88 cents to $7.12. Last week, the company announced it had joint-ventured its Namibian marine diamond concession with BHP Minerals and Benguela Concessions.

United Reef also lost ground on the week, closing down 6 cents to 56 cents. The drop comes despite rumors that the company is acquiring a significant gold property in the Central African Republic.

Dia Met Minerals and Lytton Minerals both bucked the downward trend, with the former up $1.75 to $29.75 and the latter adding a nickel to close at $3.80.