Toronto Stock Exchange Market action booming with Bay St bull

With the stock market rally continuing on North American exchanges and key indicators sprinting into uncharted territories, the 4-year old bull looks as frisky and as feisty as ever. And despite its age, indications are that the beast could be a potentially exciting source of profits this year.

So far, investors have not been disappointed. Action has been fast and furious as markets in New York, Toronto and Montreal have been on a record-setting binge.

New York’s Dow Jones industrial average muscled past the 2,000 barrier earlier this week followed by seven consecutive record closings, including today’s close of 2,035.01, after a gain of 22.08 pts.

At the Montreal Exchange, the portfolio index crashed through the its previous high of 1,623.33 and closed today at $1,643.8 after a gain of 3.41.

Toronto’s widely followed composite 300 logged in its sixth consecutive record breaking session today, Jan 14, with a 12.84 advance to 3,266.8 pts. That’s an increase of 133% from the composite’s 1,402.5 level in mid-August, 1982 when the bull’s roars were first heard.

Over the past six sessions more than $12 billion has been added to the value of Canadian stocks listed on the TSE. The heady price surge has been boosted by a variety of factors.

Oil prices have been firming on the international market gaining strength not only from the effects of production cuts and calls for fixed prices by OPEC, but also by reports that the Iran-Iraq war is intensifying. The brutal cold snap that’s currently engulfing most of Europe has also pushed up demand and sparked price increases.

Adding to this bullish effect is a weakening U.S. dollar against other major currencies and a strengthening gold price. Since the new year the price of the yellow metal has increased by $28(US) with a close today on the Montreal spot market of $417(US)-bid $418(US)-ask.

Reflecting the rising gold price on commodity markets, the TSE gold and silver index has been racking up records of its own. Over the week the index has advanced 576.12 pts to 6,102.46, its highest level since Oct 9, 1980. It’s not surprising that the majority of gold issues have been caught up in the recent euphoria and risen to new highs.

Among them are Golden Sceptre Resources and Goliath Gold Mines. With Noranda Inc, the week’s most active trader, these two members of the Hughes-Lang group of companies are spinning off the Golden Giant mine into a brand new company called Hemlo Gold Mines.

Golden Sceptre soared up $4.13 over the week to new-high at $20.38, while Goliath won $4.63 to new high at $22.38. Noranda shot up by $3.13 to $23.50, a new high. One year ago these three companies were trading at $8.88, $9.63 and $16, respectively.

Other Hemlo players have fared well in the recent market upleg. Teck Corp B shares zoomed up $2.75 to $27.25. Workings at it David Bell mine are now at the lower levels with the mill rate expected to be up to 1,000 tons per day by year-end.

Meanwhile, the fate of the Page- Williams mine is still unresolved as Lac Minerals and International Corona await the decision from the Ontario court of appeal. The market itself seems split on the winner of the suit with trading in both stocks active. Lac was up $2.88 over the week to close at $31.25, a long way from its low of $17.25 posted after the original bombshell court decison. Corona jumped $4.25 over the reporting period to close at $34, a new high.

Lac’s announcement of the initial reserve figures on the new zone of its Bousquet property in northwestern Ontario has no doubt helped boost up its shares. Lac’s neighbour to the east, Dumagami Mines, a Paul Penna company, has about 7 million tons of ore on its side of the boundary. Dumagami was up 75 cents to $12.25.

Campbell Red Lake which has about a 14% stake in Lac made a very substantial gain of $2.88 this week to close at $30.88.

Mascot Gold Mines new highed at $13.50 after a gain of $1.63 on the week. A member of the International Corona group of companies, Mascot not only plans to bring its Hedley B.C. mine into production this year but it will also manage the $2.5 million Operation Wawa exploration project this year.

Galveston Resources which Murray Pezim says will be his flagship company in the future has a 45% working interest in the Wawa project. Galveston won a whopping $5 over the week to new high at $12.25. Adds Mr Pezim, the company is just finalizing $10 million offering with some institutional investors.

Among the other winners of the week are Echo Bay Mines with a gain of $3.13 to $35.75, Placer Development up $2.38 to $34, Dickenson Mines with its A shares up $1.38 to $11.75 and its B shares up $1 to $11.50. American Barrick made a $2.75 gain to $24.25.

New highs were also set by Aur Resources at $4.10; Broulan, $2.15, Cambior, $18.13 and D’Or Val Mines at $3.45.