STOCK MARKETS — Separatism fears hit sour note on Bay St.

Fears over Quebec separation continued to exert downward pressure on money markets, with the Toronto Stock Exchange (TSE) posting its sixth loss in the past seven days. The TSE 300 index dropped 8.19 points to close at 4,198.57 for the week ended June 14.

Debate over Quebec’s future also had an impact on the bank rate and the Canadian dollar. On June 14, the Bank of Canada rate jumped 16 basis points to 6.42%. The increase raises the prospect of higher borrowing rates in the near future.

The Canadian dollar lost more than a quarter of a cent at one point on June 14, which triggered buying by the Bank of Canada; it finally settled in to close the week at US72.18 cents.

The London afternoon gold fix on June 15 was US$384.10, up $2.20 from a week ago.

All of the senior golds posted increases on the week. Lac Minerals gained 13 cents to close at $12 on a volume of more than 1.3 million shares, Echo Bay Mines jumped 25 cents to $15, American Barrick Resources closed up $1 to $33.13, Hemlo Gold Mines added 50 cents to finish at $12.13, and Placer Dome posted a gain of 25 cents to close at $30.50.

Placer recently announced that it would proceed with development at its Osborne copper-gold deposit in Queensland, Australia. Over an 11-year period, starting in 1995, the mine is expected to produce 356,400 tons of copper and 416,000 oz. gold at a cash cost of US63 cents per lb. of copper. Royalty companies lost ground on the week, with Franco-Nevada Mining down 50 cents to $76, Euro-Nevada Mining off $1.13 to $36.38 and Repadre Capital slipping 30 cents to $3.95.

After completion of a due diligence study, Sikaman Gold Resources and Golden Star Resources have elected to terminate their proposed alliance, which was announced earlier this month. Under the deal, Golden Star was to transfer its 91.5% interest in the Mahdia gold project in Guyana to Sikaman and provide up to $14.5 million in financing. In return, Golden Star was to receive a 70% interest in Sikaman through the issuance of treasury shares. Golden Star was down $2.75 to $14.50, while Sikaman lost 3 cents to close at 24 cents on a volume of nearly 1.4 million shares.

News of an agreement between International Gold Resources (IGR) and Echo Bay Mines sent shares of the junior soaring. Echo Bay paid US$1.5 million and has set out terms that could see it fund US$19 million for exploration on IGR’s Ghanaian concessions. By doing so, Echo Bay will earn a half interest in the concessions controlled by IGR. More than 468,000 IGR shares changed hands as the stock rose 55 cents to close at $4.85.

Shares of another company working in Ghana, Opawica Explorations (TSE), also gained ground, on news that the company has received reconnaissance permits for two concessions totaling more than 1,040 square miles. Shares of Opawica added 15 cents to finish at $2.95.

A revised production plan for the Golden Bear mine in northwestern British Columbia failed to impress investors of Wheaton River as the stock lost 40 cents to finish at $2.85. The plan calls for the use of heap-leach technology, which would allow Wheaton and its 81%-owned affiliate, North American Metals, to increase the mine life to five years.

Shareholders of International Platinum received more bad news this week as the TSE suspended trading of the shares until the company supplies an independent engineering appraisal of its Black Rock precious metals property in Arizona. A company spokesman said an independent evaluation of the project is under way and that a report is expected some time in late July. A cease-trading order from the Ontario Securities Commission, for failure to file financial reports, also remains in effect.