Toronto Stock Exchange (August 19, 1991)

Two of Canada’s newest issues made their presence felt during the week ended Aug. 13 despite more depressing news on the metals front.

As metal inventories on the London Metal Exchange reached a record high due to a recession-driven drop in demand, and platinum fell by US$6.25 per oz. to US$348.25, shares of Royal Oak Mines emerged on the active list. With over one million shares changing hands, Royal Oak gained nine cents to close at 77 cents. A product of the amalgamation of Royal Oak Resources and the Pamour group of gold producers, Royal Oak got little help from gold this week. The yellow metal gave up US$1.30 per oz. during the report period to close today, Aug. 14, at US$355.85 in London.

Speculation that the closure of high-cost mines at Elliot Lake, Ont., will eventually drive up the price of uranium from US$9 to around US$15 pushed shares of Cameco to a new 52-week high of $14.

Back in July when the Saskatchewan and federal governments sold 20% of Cameco to the public, the shares were offered at $12.50 each. The provincial and federal governments’ remaining interest is expected to be sold by 1995. Meanwhile, as mining companies released more first-half earnings, wary investors were being selective this week about their buying habits. Nevertheless, the market finished on an upbeat note with a 17.60-point increase in the composite 300 index which closed today at 3541.83. Changing hands were 23.2 million shares worth $310.3 million.

Gold miner Placer Dome was by far the week’s most active issue trading over 1.3 million shares. The company said first-half profits declined to 16 cents a share from 49 cents in the same period last year. This issue added 13 cents today to close at $14.63.

The red ink is still flowing at Agnico-Eagle Mines even though the company is mining richer ore at its Donald LaRonde gold mine in Quebec. One of the few Canadian gold miners not to hedge against fluctuating metal prices by selling forward its production, Agnico finished the week up 13 cents at $5.63. Affiliate Mentor Exploration gave up 15 cents today to close at $2 after advancing to $2.30 earlier this week. Mentor recently sold 350,000 Agnico-Eagle Mines shares for $5.63-6 a share to hold 2.5 million. Holding a basket of gold properties that need a much firmer gold price before being considered for development, Queenston Mining bottomed at 71 cents this week.

In what proved to be an astute move, Consolidated Brinco officer John Lecky bought 172,885 shares last month for $1.22 through private company Edmalec Holdings Ltd. The purchase has proved timely as news of a possible amalgamation with Hillsborough Resources drove Consolidated Brinco up 40 cents to $1.50. The issue closed today at $1.40. If approved, the merger would pave the way for an expansion at the Quinsam coal mine in British Columbia.

Now trading at a discount to the price of gold, platinum is being affected by selling in the Soviet Union and Japan following reports that the Nissan motor company has developed a platinum-free exhaust catalyst.

Nevertheless, would-be palladium-platinum miner Made-leine Mines is proposing to split in two separate entities, one containing the 50% owned Lac des Iles platinum project and the other a gold mine in Honduras. If shareholders approve at an Oct. 15 meeting in Montreal, sources say this will make it easier for President Pat Sheridan to consolidate Madeleine with companies holding the remaining 50% of Lac des Iles. Down five cents today, Madeleine ended the week at $4.10.