STOCK MARKETS — TSE 300 index climbs during busy trading

Although corporate Canada continues to crank out layoff notices and the “recovery” seems far from a sure thing, Canadian investors are invading the stock market.

During the week ended March 9 — when Ontario Hydro was slashing 5,000 from its workforce — 310 million shares changed hands on the Toronto Stock Exchange, making it one of the busiest weeks on record. The TSE 300 composite index posted five consecutive gains for an overall advance of 86 points. Market-watchers attribute the enthusiasm to plummeting returns on term deposits, an influx of funds from RRSP investments and a renewed interest in junior oil stocks.

But much of this new money is also finding its way into the far-from-healthy gold sector. Despite a US$2.50-per-oz. drop in the gold price to US$326.75 — its lowest since 1986 — the TSE gold and silver index rallied during our report period, adding 40 points to 5866.

As gold’s dismal performance became yet weaker today, March 10, the index gave up earlier gains, dropping 61 points or 1.05%. Volume on the TSE remained strong at 52 million shares.

Taking top spot among the most active mines was Lac Minerals, which jumped a notch from “hold” to “buy” on Salomon Brothers’ investment rating list. Salomon says Lac’s gold production costs are expected to drop below US$200 per oz. this year, from US$213 in 1992. The gold producer jumped $1 to $8.38 on a volume of 6.8 million. It closed at $8.25 today.

Accepting offers to sell one million shares from three investment dealers, Franco-Nevada Mining lost 63 cents to $37.38. The company will use proceeds of $38 million to buy larger royalties on mining properties. Also on a fund-raising drive (albeit smaller-scale) are Crown Butte Resources and Golden Star Resources. Unchanged at $5.88, Crown Butte will use private placement proceeds of $10.7 million to finance ongoing work at the New World gold project in Montana, which is soon to undergo the Environmental Impact Statement process.

Golden Star will use $10.5 million from a private placement of special warrants to explore and develop its gold and diamond properties in Guyana and Suriname.

Other gold producers in the news include Homestake Mining, off 37 cents to $18.13, and Placer Dome, up 13 cents to $17. Homestake is selling its 25% interest in the large Musselwhite deposit near Pickle lake, Ont., to Placer for $5 million. Close to $40 million has been invested in Musselwhite, which boasts reserves of 4.7 million tons grading 0.28 oz. per ton, but its remote location has always stymied development.

Placer will end up with a 68% stake in Musselwhite, while TVX Gold — up 10 cents to $2.80 — will retain a 32% interest.

High-grade (0.6 oz. per ton) gold intersections over narrow widths at the Central Inlier property in Jamaica pushed Orvana Minerals into new 52-week territory during our report period. Orvana, up 42 cents to 85 cents, is optioning the property from BHP Minerals Canada.

A press release from Dia Met Minerals that did little more than repeat information made public several months ago threw some cold water on the diamond play. Investors who had been expecting the diamond player to release news of an enhanced program for the Northwest Territories lopped $2.75 off the value of Dia Met, which closed at $41.75. Other diamond explorers fell in tandem, with Lytton Minerals losing 29 cents to $2.81 and SouthernEra Resources shedding 5 cents to $4.95. An exception was Tyler Resources, which added 12 cents to $1.02. President Glen Harper says Tyler has a crew on-site at its Crystal property, near Lac de Gras, and hopes to begin drilling its first kimberlite target by March 20.

Lytton gained 39 cents to $3.20 today, the third day of its Lac de Gras drilling

program.

The Yukon government says Curragh will have to meet 14 conditions, including moving its head office to the Yukon, if the company is to qualify for a $29 million government loan to develop the Grum deposit. Curragh must also agree to have two government observers present at all board meetings. Curragh slipped 5 cents to $1 but recovered to close at $1.05 today.