STOCK MARKETS — Asbestos Corp. soars as court rejects Quebec

Investors of Asbestos Corp had reason to rejoice during the week ended June 1 as the stock skyrocketed to $48 for a gain of $24.50.

The battle by Asbestos Corp’s minority shareholders to win a fair hearing has been raging since the Quebec government took control of the company in 1986. The province paid $80 to controlling shareholder General Dynamics but never made a follow-up offer to minority shareholders. When the bottom fell out of the asbestos market soon after the takeover, the little guys were left with a $5 stock.

Last October, the Ontario Securities Commission (OSC) won the right to investigate Quebec’s treatment of minority shareholders. Now the Supreme Court of Canada has dashed the province’s last hope to block the hearing by refusing an appeal.

With the asbestos market improving, the future for the producer — and for its current controlling shareholder, Societe d’Exploration Miniere Mazarin — looks bright. And if the minority shareholders win their battle through the OSC, it will cost the province $187 million to buy them out. Mazarin lost 2 cents to $1.71 during our report period. Asbestos Corp. closed unchanged at $48 today (June 2).

Falling base and precious metal prices left little for other TSE mining investors to cheer about. A long-expected correction in the gold price wiped US$9 per oz. off the value of the yellow metal, which closed in London today at US$369.00 per oz.

Traders attributed the decline to “deflationary” economic signals worldwide. Declining gold issues included: American Barrick Resources, down 38 cents to $28; Placer Dome, down 75 cents to $21.75; and Lac Minerals, down 63 cents to $11.50.

U.S.-based producers Pegasus Gold and Battle Mountain Gold bucked the trend, adding 63 cents to $29.25 and 88 cents to a new 52-week high of $12.38 respectively.

On the broad market, the TSE 300 index shed nine points in moderate trading following signs of a strong economic recovery in Canada but growing gloom in the U.S.

Lytton Minerals, up 50 cents to $5.25, has joined fellow diamond explorer Dia Met Minerals, up $1.25 to $63.25, on the prestigious index. It now appears investors will have to wait just a little longer (perhaps until mid-June) for the release of bulk sample results from Dia Met.

Emerging from a long dry spell was Wheaton River Minerals, which has signed a letter of intent to buy the dormant Golden Bear gold-silver mine in British Columbia from Homestake Mining (TSE). For $1 million, VSE-listed Repadre Capital plans to buy a net smelter royalty on production from the mine. Wheaton hit a new 52-week high of $1.25 before closing at $1.08 for a gain of 33 cents. Homestake added 75 cents to $22.88.

Also active, trading more than 5.3 million shares, was Belmoral Mines. President Gordon Strasser says shareholders have just received the company’s annual report and must be reacting to what they have read. Geopetrol Resources, a private company, has offered to buy about $4.5 million of debt that Belmoral owes to Aur Resources (TSE). Shareholders will vote on the transaction at the annual meeting on June 25.

Belmoral added 10 cents to 26 cents, while Aur was unchanged at $4.20. With property holdings in the hot Pipeline gold area of northern Nevada, X-Cal Resources more than doubled to close at 93 cents for a gain of 48 cents. The junior says joint-venture partner BHP Minerals has identified drill targets on their three properties. The junior gained another 46 cents to $1.39 today.

Planning to spend $22 million to upgrade its Red Lake mine, Dickenson Mines was unchanged at $6.38 in a 52-week range of $3.38-7.50. Subsidiary Wharf Resources, which plans to increase gold production at its South Dakota mines to 170,000 oz. by 1996, from 78,000 oz. in 1992, lost 13 cents to $9.63. Up 7 cents to 47 cents, Stroud Resources plans to resume drilling on its Hislop Twp. gold property near Timmins, Ont. A previous intersection yielded 0.22 oz. gold per ton over 17 ft.

Gaining 25 cents to $4.25, International Musto has boosted proven and probable reserves at its copper property in Argentina to 550.7 million tons grading 0.52% copper and 0.77 grams gold per ton.