STOCK MARKETS — Majors’ earnings exceed their expectations

Fueled primarily by higher corporate earnings, stocks on the TSE moved up sharply to end the week. Apparently, the earnings reported by many of the major corporations have far exceeded expectations.

On April 26, the Toronto Stock Exchange 300 index posted a 27.07-point increase to close at 4,263.8. This followed a 69.57 pt. surge the previous day, which was the best single showing since the end of 1987. Strength in the gold sector and a larger-than-expected decline in the bank rate also helped Bay Street gain momentum.

The bank rate dropped 19 basis points to 6.07%, while the Canadian dollar gained 0.2 cents to close at US72.82 cents.

The London afternoon gold fix (April 27) was pegged at US$374.25. After several weeks of downward pressure, most of the senior golds posted increases on the week. Placer Dome posted a gain of 38 cents to close at $27.75 on a volume of more than 3.1 million shares; Hemlo Gold Mines was up 38 cents to $12.38; Goldcorp added 25 cents to $8; Echo Bay Mines jumped 88 cents to $14.88; while American Barrick Resources was the big winner, closing up $1.75 to $30.63

Although one of the top 10 active issues on the TSE this week, Lac Minerals remained unchanged at $11.63. Investor interest in Lac appears related to the company’s involvement in the Fort MacKay area of northeastern Alberta. Lac recently reached an agreement with Tintina Mines and NSR Resources to pool their respective land holdings in the area. Tintina gained 40 cents on the week to close at $3.75, while NSR was up a penny on a volume of almost 4.3 million shares.

Rumor has it that Newmont Mining, Homestake Mining, Echo Bay, and Placer Dome may also be involved in the Fort MacKay play.

Several junior gold issues fared well on the week, with Kinross Gold up 13 cents to $5.63; Richmont Mines also gained 13 cents to close at $5.13, while St Andrew Goldfields posted an increase of 6 cents to $1.21. Although St Andrew generated an operating profit of nearly $1.4 million at its two mines in northeastern Ontario, the company still managed to post a loss of just over $2.8 million last year.

Bucking the upward trend were Miramar Mining, off by 38 cents to $5.78, and Golden Star Resources, down 63 cents to $17.13. Golden Star recently announced that it has signed a deal to acquire two groups of gold properties in Venezuela and that the mineral agreement on its Gross Rosebel project in Suriname has also been inked.

Another big loser on the week was Sudbury Contact Mines, which shed $1.50 to $6.13. The loss comes in spite of news that additional encouraging gold values have been intersected on the company’s Victoria Lake property near Kirkland Lake, Ont.

Cuban gold explorer Caribgold Resources hit a new 52-week low, closing down 35 cents to $3.75 on a volume of just 70,200 shares.

Gold royalty companies were mixed, with Franco-Nevada Mining losing $2.25 to $70.75 and Euro-Nevada Mining gaining $2 to $37.50 on a volume of 265,900 shares.

Diamond issues were also mixed on the week. SouthernEra Resources tacked on 63 cents to $6.75, Ashton Mining of Canada was up 20 cents to close at $2.65, and Arkansas explorer Texas Star Resources tacked on a dime to $4.10. SouthernEra announced this week that it had signed a deal with Vancouver-based Kalahari Resources to up its interest in the latter’s MacKay and Back Lake properties in the Northwest Territories.

On the down side, Pure Gold Resources was off 1 cents to 55 cents on a volume of 2.7 million shares; Dia Met Minerals lost $1.75 to $28; and Diamond Fields Resources, which just received its Toronto listing, hit a new 52-week low of $8.50, off $1.13 over our report period.

Metal miners had a good showing during the period, with: Cominco up $1.13 to $21.25; Noranda up $1 to $24.25; and Teck up $1.25 to $23.25. Inco, which tacked on $2.63 to close at $32.88, announced that early retirement incentives for staff employees at its Sudbury district operations had been extended to make more staff eligible.