Trading Summary (June 25, 2001)

After finally pulling out of its slide last week, the Toronto Stock Exchange resumed its decent on Monday as investors remained on the sidelines, awaiting word of the U.S. Federal Reserve’s decision on interest rates on Wednesday. The Fed has already cut interest rates five times this year — by 50 basis points each time. By day’s end, the merchandising subindex was the lone advancer, edging up just 9.36 points. The golds fell 50.61 points to 4,666.69 and the base metal issues lost 119.73 points, or 2.8%, to 4,241.72.

The big noisemaker among the country’s miners was Barrick Gold, which fell $1.25, or 5%, to $23.80 with just less than 8 million shares on the go. The company, North America’s second-largest gold producer, announced a share-swap plan (worth US$2.3 billion) to acquire rival producer Homestake Mining. The deal would boost Barrick’s production by more than 2 million oz. gold per year and give it a much-needed Australian presence. It would also make Barrick the world’s second-largest gold producer behind London’s Anglo American. Homestake Canada shares shot up $2.41, or 24.7%, to $12.15.

Placer Dome climbed 49 to $15.89 on more than 1.9 million shares. Twin Mining rose 4 to 50 on about 1.9 million shares to bring the number of mining stocks on the TSE’s top 10 most active list to three.

Other gold miners making gains were Kinross Gold, up 4 to $1.34, TVX Gold, 2 higher at 90, Franco-Nevada Mining, up a nickel to $19.25, and Goldcorp, up 41 at $16.94.

Advancers on the base metal side of things were few and far between. Alcan was the most active with less than 870,000 shares on the move. The issue fell $2.01 to $60.59. Inco was off 75 to $25.15, Falconbridge fell 80 to $16.50 and Sherritt International was 22 lower at $5.05. Teck’s B series and Cominco each dropped 24, to $12.99 and 29.11, respectively. Boliden managed to tack on 2 to 61.

Cominco and Teck expect their proposed $1.4-billion merger to take effect on or about July 20. Together, the two stand to become the world’s biggest zinc concentrate producer. Teck, which already owns 51% of Cominco, has offered Cominco shareholders 1.8 class B subordinate Teck shares and $6 in cash for each Cominco share held.

Despite a surge in mining-related stocks, Canada’s junior exchange started the trading week off by drifting slightly lower. The Canadian Venture Exchange ended the day virtually unchanged, losing 1.18 points to close at 3,256.11. The Mining Index bucked the negative trend, gaining 96.03 points, or 1.3%, to close at 7,449.19.

Shares in RJK Explorations exploded upwards on news that a stripping program on the Stares-Calvert property near Thunder Bay has uncovered a zone of massive sulphides. In partnership with Toronto-listed Greater Lenora Resources, the companies have exposed a 10-metre-wide unit containing zinc, copper and lead mineralization similar to that discovered in boulders. RJK ended the day up 27 to 48 on 685,000 shares.

Making a nice move, Inca Pacific climbed 6 to 36 on 320,000 shares. Anaconda Peru, a wholly owned subsidiary of Antofagasta Plc., is in the midst of a US$3-million exploration program at the Magistral copper-molybdenum project in Peru. Anaconda has earned a 30% interest in the property from Inca Pacific Resources.

Rhonda gained ground on news that the final three holes of a six-hole drill program on the Knife kimberlite in Nunavut increased the north-south dimension of the pipe to 390 metres. Stock in the junior added 4 to 58 on 116,400 shares.

Kensington Resources ended the day unchanged at 74 on 86,000 share. The Fort la Corne joint-venture partners are about to launch a $4.8-million exploration program over the diamond project this week. Earlier in the year, revenue modelling results by De Beers suggested a range of between US $17 and US $33 per tonne for body 141. The project is held 42.25% by De Beers, 5.5% by Cameco, 10% by UEM and 42% by Kensington