STOCK MARKETS — Rio Algom active issue on Rio Tinto share

Toronto-based Rio Algom emerged as one of the most active issues on The Toronto Stock Exchange during the week ended June 29, as British resource giant RTZ completed a second offering of 22.5 million shares.

Underwriters led by Gordon Capital are offering the shares at $16.10 each to buyers who can pay in three instalments of $5.40 initially, and $5.40 and $5.30 by June 23, 1994. Rio Tinto Zinc said it is selling its 51.4% interest in Rio Algom to avoid competition with its other North American affiliate, wholly owned Kennecott Corp. While the sale indicates that the British company has decided to sink its eggs in Kennecott rather than Rio Algom, shares of the Toronto company stayed even at $15.50-15.63.

Ironically, Kennecott is a major player in the Lac de Gras diamond hunt where Dia Met Minerals and BHP-Utah Mines have discovered gem-quality diamonds on a 50-square-acre kimberlite pipe. Although BHP confirmed this week that 25% of the stones found on the property are gem quality, market reaction clearly indicates that investors were looking for more information.

Shares of all the key players, including VSE-listed Dia Met, Aber Resources, SouthernEra Resources and Tyler Resources, fell in value during the report period. After trading at $2.04 last week, Aber dropped today, June 30, to $1.75. SouthernEra skidded to $1.60 from $1.98, while Tyler slipped to 26 cents from 37 cents. Analysts in Toronto are now waiting for Aber director Christopher Jennings to make the next move with a financing deal for its Lac de Gras property.

Investors who attended Madeleine Mines’ recent annual meeting will also be awaiting eagerly results of autoclave tests now being conducted at the Lac des Iles palladium-platinum project near Thunder Bay, Ont.

President Dale McDoulett said the company is hoping to use autoclaving techniques to process palladium-platinum concentrates to avoid the high cost of smelting. While McDoulett said Lac des Iles will

be primarily a palladium producer, this week’s US$11.90-per-oz. spike in the price of platinum will undoubtedly boost the project, if the increase is sustained. Coincidentally, Madeleine added an impressive 40 cents today to close at $2.75.

Trading at US$378.50 on the spot market, platinum is being buoyed by fears that the Boipatong massacre could disrupt supply from mines in South Africa. Gold, by comparison, was relatively steady this week. The yellow metal fell by US60 cents to close at US$343.40 per oz.

On the broad market, share prices were driven by expectations that the U.S. Federal Reserve Board will react to low housing sales figures by dropping interest rates yet again. Today, Toronto’s 300 composite index advanced 11.09 points to 3387.70 after 32.5 million shares valued at $335.8 million had changed hands. Base metal stocks, including Inco and Noranda, clearly helped to fuel the composite 300 rally.

Having filed notice of its intention to raise US$500 million over the next two years, Noranda was up 25 cents to $18.75 on 557,450 shares. Sparked by economic indicators and a US17 cents nickel gain, Inco added 38 cents to its share price.

The spotlight fell on Curragh once again as the inquiry into the deaths of 26 employees at the Westray coal mine got under way in Stellarton, N.S. The 1.1 million shares crossed by Toronto-based Nesbitt Thompson at $2.90 each this week put Curragh among the active issues, before the stock climbed to $3 today.

In other news, Joutel Resources has signed a letter of intent with a private company to acquire the exclusive exploration rights over large areas of volcanic terrain in Cuba. But any share price gains are pegged to developments at the 26-claim Joutel copper property in northwestern Quebec, where Aur Resources is scheduled to resume drilling this week. Aur was even at $2.90 while Joutel traded at 13 cents.