STOCK MARKETS — TSE runs out of steam in quiet trading

The decline continued this week on the Toronto Stock Exchange, with the TSE 300 composite index posting four days of losses in light trading, followed by a 1-day buying spree.

Over the period Jan. 10-16, the TSE 300 fell 46.46 points (1%) to 4,765.99, having closed as low as 4,739.70 on Jan. 15. Daily volumes, high at the start of the week, declined rapidly until the market rebounded in heavy trading. The resource stocks, particularly the base metals, were weak, with both golds and metal miners lower.

The Canadian dollar stayed near US73.4 cents for most of the week but fell sharply on Jan. 16, closing at US73.06 cents. The loony was up sharply against European currencies and steady against the Japanese yen. The Bank of Canada rate fell 5 basis points to 5.73% following a slight decline in T-bill yields at the Tuesday auction.

The London gold price stayed below US$400 this week and was fixed at US$398.90 per oz. on the morning of Jan. 17. The fix was $2.15 higher than last week. Platinum continued to show strength, tacking on $3.90 for a Jan. 17 fix of US$419.75. Only silver lost ground, falling 5 cents to US$5.49 per oz.

The gold and precious metals sub-index was 186.26 points lower, a loss of 1.6%, closing Jan. 16 at 11,397.21. TVX Gold was the most active in the group, and one of the few winners, posting a 62 cents gain to reach $11.88.

Barrick Gold was down $1.25 to $38.38, Placer Dome fell 75 cents to $36.12 and Teck B-series lost $1.12 to $26.75. Cambior added another 25 cents to close at $16.75. Hemlo Gold was up $1 to $16 and Agnico-Eagle Mines shot up $1.12 to $20.62.

Nickel picked up 12 cents to close at US$3.54 per lb. on Jan. 17, while prices of the other base metals held steady. TSE base metal stocks did nothing of the sort, sinking 133.07 points (2.8%) to 4,687.47 on the week, and even missing out on the price recovery of Jan. 16.

Inmet Mining continued to trade heavily, and lost 12 cents to close at $9.25. Noranda was off $1.75 to $25.38 and copper-sensitive Rio Algom was $1 lower at $23.50. Nickel stocks didn’t respond to metal price strength, with Falconbridge down $1.25 to $27.88, Inco off 75 cents to $43 and Diamond Fields Resources losing $1.12 to close at $27.88. Only Cameco resisted the tide, picking up $1.38 to finish at $55.12.

Oil and gas producer Alberta Energy, which completed its takeover of Conwest Exploration, was down 50 cents to $22.50 in active trading (mainly related to the takeover). Conwest was also down 50 cents, to $27.75. The merged company still plans to go ahead with its proposed disposal of Conwest’s mining interests.

The junior exploration companies had a much better week than their big brothers, with many issues posting strong gains. The most active junior on the TSE was Arequipa Resources, which saw 11.6 million shares trade and shot up another $1.62 to $7.25. The company, with a promising gold discovery in northern Peru’s Ancash province, did not release any further news this week.

Another junior with Peruvian interests, Altai Resources, announced it had acquired a 70% interest in a gold property in southern Peru, with probable reserves of 216,000 tonnes grading 16 grams gold per tonne and possible reserves of 2.3 million tonnes grading 24 grams per tonne. It also is acquiring a property in the Philippines. Altai was up 6 cents to $1.07, and Solitario Resources, with a Peruvian property under option to Barrick, added 31 cents to $2.76. Another Philippine explorer, International Pursuit, was up $1.12 to $4.88. Black Swan Gold, up 6 cents to 22 cents on 7 million shares traded, announced results from its Mungari property in Australia.

Indonesian plays were big gainers on both the Toronto and Montreal markets in the past week, with Montreal-listed Bresea Resources riding its interest in Bre-X to $9.50, up $1.50 on the week. Yamana Resources announced it had arranged financing with Barrick Gold to explore 12 contract-of-work areas in northeastern Kalimantan. Yamana jumped 75 cents to $3.25. Tandem Resources announced it was negotiating for an Indonesian property, and rose 62 cents to $1.45. Mispec Resources slipped 9 cents to $1.31 and Goldstake Exploration fell 13 cents to $1.32.