STOCK MARKETS — Interest-rate hike hits market; gold in

The Toronto Stock Exchange surpassed another record during our report week when 106 million shares worth $1.27 billion changed hands on Feb. 2. Such enormous volumes, however, were overshadowed by a market that was in general decline.

The key to the sharp selloff was an interest rate hike by the U.S. Federal Reserve Board. Investors worried that rising interest rates could stifle the still-fragile economic recovery in the U.S.

During our report week, the TSE 300 composite index fell to 4,452.18 (Feb. 8 close), a decline of more than 120 points. The gold and silver index was off as well, falling more than 600 points to 10,383.61.

Bullion prices also caught the down escalator, losing US$4.70 to US$380.25 per oz.

Among the major gold equities, American Barrick was down nearly $4 at $34.13; Placer Dome down $3.50 at $32.13; Lac down a dollar at $11.63; and Echo Bay off $1.38 at $16.75. In fact, none of the seniors escaped the prevailing negative sentiment.

News that TVX had agreed to partner with High River Gold in the development of the Snow Lake gold project led to considerable enthusiasm among High River shareholders. The stock rose 35 cents with nearly 1 million shares changing hands and closed at $2.10.

It didn’t do much for TVX, however. It unsuccessfully fought the downdraft among the senior golds and lost 25 cents to close at $8.50. TVX is also in the midst of acquiring ground in Venezuela that is under a legal cloud between Venezuelan investors and Gold Reserve.

TVX will pay US$1.75 million in staged payments up to June 30 of this year for 90% of the Venezuelan company that holds the ground under dispute. TVX says it “has obtained independent legal advice as to the merits” of the suit. Gold Reserve lost $1.25 to close at $15.50. Only a few weeks ago it had hit a 52-week high of $23.50.

Aur Resources has gained ground during the past several months as its 30%-owned Louvicourt polymetallic mine takes shape in northwestern Quebec. Aur closed up another few cents this week at $7.25. Late last year, it had been trading at the $4.50 level. Teck holds 25% of the project while Novicourt (61% owned by Noranda) holds 45%. Novicourt was unchanged at $5.25. It had been trading as low as $3.60 in October.

Over a 17-year mine life, Louvicourt should produce 1.8 billion lb. copper, 671 million lb. zinc, 512,600 oz. gold and nearly 14 million oz. silver. Waddy Lake, a company whose Komis late-exploration project in Saskatchewan is proceeding nicely, ran up another 40 cents, closing at $1.55. Volume was nearly 750,000 shares.

Another junior, T & H Resources, bounced impressively to 54 cents, a gain of 25 cents. At one point during the week it hit a 52-week high of 70 cents. T & H is negotiating to acquire a 40-60% interest in a cement plant in China. Richmont Mines is buying a 31% stake in Louvem for $2 million from St. Genevieve. According to Richmont President Jean-Guy Rivard, the immediate prize in the acquisition is Louvem’s stake in the Beaufor project (the old Beacon gold mine). The property has reserves of 600,000 tonnes grading 0.25 oz. gold per tonne. The deposit is only 20 miles from Richmont’s Camflo mill, which has plenty of excess capacity to handle custom ore.

Rivard expects 50,000 tonnes of Beaufor ore will be processed there this year. This transaction, of course, would boost Richmont’s 1994 gold output. Richmont was off 10 cents to $4.90. St. Genevieve closed at 46 cents, off a penny.

Joutel got a shot in the arm when Teck announced it will buy 1.5 million Joutel shares and plans to earn a 50% interest in three of Joutel’s Cuban properties. Teck can also invest another $4.5 million in Joutel stock at prices up to $2 per share during a 3-year period. Joutel closed up 2 cents to 73 cents. It had hit a 52-week high of 78 cents during the week.