STOCK MARKETS — Market upset follows drop in dollar, rise in

The Toronto Stock Exchange went into a tailspin at the close of the week ended Sept. 29, as constitutional uncertainty and a related dip in the Canadian dollar put investors in a selling mood.

The TSE 300 composite index ended the week down 35 points. Today, Sept 30, the index fell another 29.4 points on a volume of 30.4 million shares. Anticipating a sharp increase in the Bank of Canada’s key rate after the dollar’s fall to 4-year lows, most of the chartered banks today announced increases of 2% on their prime lending rates.

Analysts expect the dollar, interest rates and stocks to remain volatile until the Oct. 26 vote on the Constitution. Some say the dollar’s drop may fortify the “Yes” side by frightening previously undecided voters. Mining stocks did not escape the carnage. The TSE’s mining and mineral index slipped 16 points during the week. After gaining a few points, the gold and silver index plunged 82 points today as interest-rate-driven investments started to look more attractive.

A declining nickel price further weakened Inco, which touched $30. Timmins Nickel was also off, losing more than half its value to 9 cents on heavy volume. Nickel opened this morning in London at US$3.03 per lb.for a 6 cents decline during the week.

Although the provincial government says it’s prepared to lend Cominco $50 million to upgrade its lead-zinc operation in Trail, B.C., the base metal miner lost $1 to $20.63.

Gold stocks did not fare much better, with the gold price holding steady in London at just under US$350 per oz. About to hoist the last load of ore from its Camflo gold mine in Quebec, American Barrick Resources shed 38 cents to $38.38. Vice-president Vince Borg flatly denied rumors that Barrick plans to move its head office from Toronto to Denver or anywhere else. Barrick lost another 75 cents today, to $37.63.

Royal Oak Mines, still suffering from the after shocks of September’s fatal mine explosion, lost

a penny to $1.95. Lac Minerals finished the week down 13 cents to $8.13. Bucking the trend was Placer Dome. The gold miner closed at $14.50, within pennies of its 52-week high, for a gain of $1.25. Word on the street is that Placer is planning to put an end to exploration in Canada in favor of overseas projects.

Kerr Addison Mines (TSE) also continued to strengthen on speculation that Noranda will make a buyout offer to minority shareholders in order to use Kerr’s rich treasury to pay off dividends.

Kerr touched a new high of $19.25 before dropping back to $18.75. Noranda slipped 87 cents to 19.38.

Platinum, which opened this morning at US$367.50 per oz. for a gain of $3.35, proved to be the most volatile of the precious metals. The future of negotiations between the African National Congress and the government in South Africa, a major platinum producer, remains uncertain.

Juniors hoping to list on the TSE from now on will find it tougher sledding than their predecessors. Under the exchange’s new listing requirements, mineral exploration companies need to have a public float of $2 million, up from $1 million, and net tangible assets of $2 million.

One recently listed miner, Arimetco International, jumped 10 cents to $3.95 after announcing a deal to acquire an 80% interest in the San Andreas gold project in Honduras. Drilling designed to confirm a reserve base of two million ounces gold is expected to begin this month.

Control of Audrey Resources has been sold to Cambior for $13 million. Cambior, which now holds 65% of Audrey, closed unchanged at $10.38 today. Audrey slipped 2 cents to 60 cents.

Dickenson Mines was also off after announcing that it has arranged a credit facility of up to $10 million to help it redeem $19.7 million in debentures. Dickenson, off 5 cents to $4 today, has also had its gold loan extended by six months to the end of 1995.