Toronto Stock Exchange Market gets off to lacklustre start as gold

Market activity got off to a slow start as investors finally said goodbye to 1991 and got down to business. Today, Jan 2., only 10.5 million shares changed in a lacklustre session that one can only hope isn’t a sign of things to come. The lack of interest was hardly surprising considering that market players are burdened with a 7% general goods and services tax on everything from beer to bedroom slippers and the knowledge that life will get more expensive in 1991.

The composite 300 index, which in 1990 saw its worst decline since 1974, posted a 17.39 point decline during its first session of the year to close at 3239.36. As sellers moved in to take advantage of some of the ground won during the Christmas week, gold fell almost US$2 per oz. to end the week at US$390.80 in London.

Before the New Year break, gold had advanced to US$392.50 because of the weakening U.S. dollar and rising tensions in the Middle East. All eyes are now on the Jan. 15 deadline that Iraq President Saddam Hussein has been given to withdraw his troops from Kuwait.

As gold issues also retreated, the precious metals index gave up 84.68 points to close at 5680.14. Among the stocks affected by the decline were American Barrick, down 50 cents, Placer Dome, down 37 cents and Corona, which slid 15 cents to $4.85. LAC gave up 25 cents.

Shares of Euro-Nevada Mining were down 15 cents despite news that the royalty specialist has added a 1% net smelter return royalty on the Eskay Creek property in British Columbia to its list of assets. Euro- Nevada paid Prime Resources Group $9.5 million for the royalty.

Hemlo Gold, one of the few issues to buck the gold sector down trend, has called a halt to negotiations relating to the purchase of the mill and infrastructure at the Magnacon gold mine near Wawa, Ont.

It added 13 cents. Hemlo said the decision was based on problems relating to the acquisition of the mill assets and their future operation.

Shares of Central Crude, Hemlo’s affiliate, and joint venture partner at the Eagle River project near Mishibishu Lake, Ont., remained even at $3.65.

On the base metal front, shares of Inco, Noranda and Rio Algom all remained even today. Hudson Bay Mining was also unchanged on news that a new 3-year wage deal has been ratified by employees at the company’s Snow Lake and Flin Flon operations in Manitoba. Retroactive to Oct 1., the new contract includes a profit-sharing concept that will replace metal-price bonuses.

Teck, also steady at $20, is reported to be eyeing some of the assets held up for sale by Denison Mines. Denison A shares added 3 cents to close at 70 cents.

Meanwhile, Madeleine Mines appears to be going ahead with its palladium-platinum project at Lac des Iles, near Thunder Bay, Ont.

While no firm production dates have been mentioned, a crusher and mill have already been built on the property and the company’s U.S. investors are now waiting anxiously to hear about the company’s plans.

Officials at the Ministry of the Environment in Thunder Bay, however, claim that no mining permits will be issued until they are satisfied that the operation meets all of their requirements.

In conjunction with this week’s US$3.50-per-oz. slide in the price of platinum, shares of Madeleine gave up 10 cents to close at $4.60.

In other news, Cambior has completed the final feasibility study on a Guyana gold project that is expected to produce 255,000 oz. gold starting in 1993. But Cambior, which can earn 70%, and partner Golden Star Resources 30% have to wait for environmental studies and other contingencies before going ahead with a $151.5-million development plan.

Canamax Resources reached a new low of 35 cents. On Dec. 20, the company said it was taking a $39.5-million writedown on currently held assets and investments.