Arimetco, Royal Oak top TSE list in 1991

Toronto-based copper producer Arimetco International emerged as the top performer last year among Toronto Stock Exchange-listed mining stocks, according to a survey by First Marathon Securities.

Sparked by its use of SX-EW technology to extract copper reserves from properties in the U.S., Arimetco was one of only 12 mining stocks to beat the 7.8% gain recorded by the TSE’s composite 300 index in 1991. Regarded as a “special situation” by analyst John Lydall, Arimetco shot to $3.70 at the end of 1991, from $1.30 a year earlier.

The 184.6% gain in the value of Arimetco shares put it well ahead of Vancouver gold miner Royal Oak Mines , which ranked second among mining issues in 1991 with a gain of 90.5%.

Since Royal Oak combined the assets of the Pamour group of companies to emerge as a 200,000-oz. per-year gold producer, the shares have advanced from 84 cents in July to $1.60 by year-end.

Lydall attributes Royal Oak’s strong performance to growing confidence that the company can continue to show growth and profitability despite low gold prices.

Royalty gold specialist Euro-Nevada Mining and affiliate Franco-Nevada Mining ranked third and fourth among performing mining stocks last year due to growing returns from their Nevada assets.

Euro-Nevada advanced to $16.63 from $11, while Franco-Nevada increased to $22 from $15.88 in the same 12-month period.

American Barrick Resources, another major player on the Carlin, Nev., gold trend finished seventh on the mining list as the value of its shares increased by 26.1% from $25.38 at the end of 1990 to $32.

While 1991 was a poor year for the base metal sector, shares of Inco , Noranda and Sherritt Gordon all outperformed the TSE 300 with gains of 20%, 11.2% and 13.1% respectively. Also outstripping the 300 index were Equity Silver , Potash Corp. of Saskatchewan and Viceroy Resources. Viceroy recently hit a new high-grade gold zone at its Castle Mountain project in California where heap leach production at a rate of 8,000 tons per day is about to commence.

The impressive 33.1% advance in Potash shares indicates the importance of earnings, cash flow and dividends to investors, says Lydall. Noranda affiliate Minnova sneaked ahead of the TSE 300 with an increase of 10.9% in 1991.