Toronto Stock Exchange Aur and Louvem surge in wake of hot drill

Drilling by Aur on a property near Val d’Or, Que., hit good copper, zinc and gold values across big widths (see front page story). The market reacted quickly.

Aur surged to a new high of $9.38 before settling at $9.13 on volume of 536,000 shares. Louvem, which claims an equal interest in the property — a claim disputed by Aur — traded more than 1.3 million shares today to close at $4.60. St. Genevieve, which holds a 56% stake in Louvem, saw 936,175 shares exchanged for a closing price of $2.21.

The action in these three stocks coincided with a major buying spree of senior gold equities. The gold and silver index surged by almost 2.5% to close at 6190.46 pts — a new high. The move came despite an easing in bullion prices, which slipped marginally to $379.75(US) per oz on the second London fix.

Volume of 34.8 million shares reflected the enthusiasm for golds and the Val d’Or base metals discovery. Overall performance saw a 20.72-pt jump in the composite index which closed at 3837.44 pts, also a new high. Base metals were also winners, adding 22.76 pts to the index which advanced to 3302.55 pts.

The binge in senior golds was due the growing perception amongst institutional traders that this sector was becoming oversold. Some of the big winners included American Barrick Resources which added another dollar to $31.38.

Echo Bay Mines traded about 200,000 shares, picking up 62 cents to $19. LAC Minerals was also active as more than 260,000 shares were trading, resulting in a closing price of $12.63 — up 25 cents on the day. Hemlo Gold Mines, Canada’s lowest cost producer and most defensive gold stock, was also a popular issue, climbing to $15.88 on volume of more than 170,000 shares today.

Audrey Resources remained quiet, slipping a nickel to $3.70 on thin volume. The issue is considered a prime takeover target. Audrey, which is 30% controlled by Northgate Exploration, owns a 70% interest in the Mobrun zinc-copper mine in Quebec. A new mill is up on site and a big deposit has been found recently. Northgate is considered the most likely suitor.

Wilanour Resources made a healthy gain, moving smartly to $3.75 on very thin trading of less than 7,000 shares. The company has a stake in a big exploration effort managed by Inco Gold on the former producing Cochenour-Willans properties near Red Lake, Ont. Talk is that Inco has received excellent results to date.

Diamonds are a girl’s — and Claude Resources’ — best friend. Management must be smiling after witnessing the company’s share price bound to a high of $6 before coming back to reality at $4.30. Claude reacted to news that Corona Corp. had discovered diamonds in drill core from a property near Prince Albert, Sask. The area is hot with plenty of exploration activity (see front page story).

Asbestos Corp. took a severe hit after the Environmental Protection Agency said all asbestos use in the U.S. will be banned. Although the U.S. is not an important market for Canadian producers, the statement, which was politically motivated, tarnished an already bruised industry image. Asbestos Corp. promptly lost $1.50 to close at $7.

Windarra Minerals was unchanged at 95 cents . The company holds a big position in Caribbean Resources and Exmar Resources, a couple of VSE-listed juniors who made a gold find in the Mishibishu Lake area west of Wawa, Ont.

Nickel producers Inco Ltd. and Falconbridge Ltd., were both active. Inco made a small gain to $33.88 whereas Falconbridge slipped to $27.75. Greenstone Resources was unchanged at $4.25 holding on to an earlier advance. The company is active with several advanced mining projects in Latin America.

Golden Shield Resources is no longer to be found on the TSE. The issue was suspended after the company filed for bankruptcy. The Kerr mine which Shield owns was a money loser, closed after the power was shutoff due to an unpaid hydro bill.

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