The Toronto Stock Exchange had a relatively quiet week, with low to moderate trading volumes and little movement in the indices. The TSE 300 composite index fell 9.53 points over the period Feb. 21-27, closing at 4,954.27. The net loss was only 0.2%. Both mining sub-indices rose against the market trend.
The Bank of Canada announced that its recognized bank rate will no longer be set at 0.25% above the average yield for 90-day Treasury bills. The new bank rate will be equivalent to the Bank’s upper limit on overnight loans to financial institutions, which is currently 5.5%.
The bank’s move had the effect of signalling a 9-basis-point increase in the rates, not enough to have an effect on the prime rate but sufficient to send the Canadian dollar on a sustained rise against foreign currencies. The Loony was trading at US72.74 cents by Feb. 28, a modest increase of 0.20 cents against the U.S. dollar, and was up sharply against most European currencies.
Gold prices fell 80 cents on the week in London, with the Feb. 28 morning price fixed at US$397.70 per oz. Silver was also lower, fixed at US$5.46 per oz. on Feb. 28. Platinum was thrown for the biggest loss, closing at US$408, down $9.50 per oz.
For the five trading days ended Feb. 27, the TSE gold and precious metals subindex was up 122.89 points, or 1%, to 12,550.54. Placer Dome was the most active issue and one of the big gainers, closing at $39.75, up $1.75. Barrick Gold, at $42.12, and Echo Bay Mines, at $19.25, were both up 12 cents. TVX Gold lost 38 cents to finish at $13.75 and Kinross Gold was unchanged at $12.88.
Both Franco-Nevada Mining and Euro-Nevada Mining announced they intend to split their shares. Each of the boards of directors will ask for shareholder approval of a proposed 2-for-1 share split at an annual meeting to be held later in June. Franco shares added $1 to $85.50, while Euro shares were up 63 cents to $52.50.
London metals were mixed, with nickel taking a 14 cents loss to close at US$3.59 per lb., and copper picking up 2 cents to close at US$1.15 on Feb. 28. Zinc was unchanged at US47 cents and lead fell 1 cents to US35 cents per lb. The TSE metals and minerals subindex was 23.50 points higher on the week, closing Feb. 27 at 5,169.01.
Base metal issues were stronger, with Diamond Fields Resources up $1.38 to $38.38 and Inco up $1.25 to $44.62 in defiance of nickel’s price weakness. Rio Algom was heavily traded, tacking on 88 cents to close at $25.88, and Aur Resources picked up 38 cents to close at $9.88.
Noranda was down $1.25 to $26.50. The Leviathan of Adelaide Street announced plans to acquire the remaining 48% of Kerr Addison Mines that it does not own, with a share-for-share swap and a $1.75-per-share dividend from Kerr. Noranda also offered minority shareholders of Brenda Mines $21 per share for the 24% it does not own. Kerr Addison was up $1.75 to $28, and Brenda added $4.38 to close at $21.
A planned secondary offering of 10.5 million shares of Cameco failed to dampen market enthusiasm for the uranium producer. Cameco shares rose 25 cents to close $73.50.
Shares of Globex Mining Enterprise hit a new 52-week high on the news that the company has signed a deal to acquire a majority interest in a gold project in Nevada. Globex intends to acquire a controlling interest of a company that owns the Tonkin Springs gold project in Nevada from Royalstar Resources. Tonkin Springs is at the development stage and hosts proven and probable reserves of almost 1 million oz. Globex shares jumped $1.25 to end at $5.25.
KWG Resources continues to be an actively traded issue, with more than 3 million shares changing hands. The company also posted a new 52-week high before edging back to $18.25, up $2.63.
Other issues that set new milestones this week included: Freewest Resources up 50 cents to $1.53; Geomaque Exlporations up 48 cents to $2.79; and JAG Mines up 70 cents to $1.35.