Toronto Stock Exchange Market suffering bout of directionless

A natural bout of directionless trading appears to have taken hold of the Toronto Stock Exchange as most indices remained relatively unchanged from last week. The tse composite drifted down 13 pts today to 3,921.64. Gold bullion was similarly quiet and steady, trading at $457(US) per oz. The gold index was modestly better, up 10 pts to 10,067 pts for the day.

All this spiritless activity comes on the heels of a precipitous drop in the composite index last week and could represent the end of a downward correction. Gold, which has benefitted from the weakened U.S. dollar, has held its own in light of upwardly creeping interest rates. Inflation fears and a looming U.S. dollar crisis appear to be providing the primary support for bullion.

That support and the perception that gold is going much higher no doubt were factors behind T. Boone Picken’s hostile takeover bid for Newmont Mining. The only real asset there is Newmont’s 90% interest in Newmont Gold — a company boasting 14 million oz of gold in the ground, or the largest on this continent. Most of that gold is in the fabled Carlin area of Nevada.

The Newmont bid is leading to a reassessment of the Carlin trend and Canadian miner, American Barrick Resources is one of the beneficiaries. Barrick plans to boost gold output in a deal with Newmont to jointly mine the Post deposit near Carlin. Barrick surged to a high of $37.63 before settling back to $36.88. On a pre-split basis, that’s equal to more than $73.

Galactic Resources, which holds a 10% stake in the partnership making the Newmont takeover bid, finally reacted. The issue surged by $2 to $17.88 before settling back to $17.38. Volume was a healthy 296,293 shares for the day.

In platinum circles, Madeleine Mines appears to be getting hurt from a $4.5 million law suit launched against the company and shareholder Patrick Sheriden. The suit, according to Jim Hunter, the plaintiff and a promotor of Madeleine, is for non-payment of 300,000 Madeleine shares for services rendered in promoting the issue. Madeleine has drifted lower from a high of $16.38 to $10.38.

Another lawsuit issue, Metalore Resources, boomed to $48.38; up almost $8 for the week. Believe it or not, the move follows news that Hudson Bay Gold, which optioned Metalore’s Brookbank property in Ont., reports very disappointing results from deep drilling on the claims (N.M., Sept.7/87).

Base metals producers, Inco Ltd. and Falconbridge Ltd., were both strong performers. Inco was steady at $27.50 while Falconbridge traded at $28.50. Both issues are reacting to markedly improved nickel and copper prices.

On the exploration front, Golden Rule Resources was active at $8, churning through 223,100 shares. Partner smdc, Saskatchewan’s provincial mining company, has confirmed the presence of high grade gold values on their joint ventured properties near La Ronge, Sask.

T & H Resources was also an active trader, as 749,170 shares traded hands. The issue advanced sharply to $1.85 — a new high — before settling back to $1.81. The company holds a 50% stake in a property in Garrison Twp., Ont. Drilling cut a 70-ft section grading 0.09 oz gold per ton. Included in the section was 11 ft of 0.3 oz gold and 5 ft grading 0.56 oz gold per ton. Jonpol Explorations, the equal partner on the project, was also stronger.

Cuvier Mines, which is active in Newfoundland, exploring for gold and polymetallics, improved nicely to a high of $1.12 before closing at 92 cents . More than 266,350 shares were exchanged.