STOCK PAGES — Precious metals react to currency market

The mood was bullish for precious metals during the report period ended April 4, as the U.S. dollar struggled to hold its own against the Japanese yen and German mark.

Gold, which had been stuck in the US$380-per-oz. range for more than a few weeks, briefly traded above US$400 in New York before falling back to the US$390-395 range. And silver rebounded to trade above US$5 per oz. Also showing renewed strength were platinum and palladium, with buyers from the Far East apparently taking a large part of the credit for the price surge. In New York, the Dow Jones industrial average continued its record pace, cracking the 4,200-point level on April 4. In contrast, the Toronto Stock Exchange 300 composite index was off on the week by almost 48 points, closing at 4,251.76. The Canadian dollar closed April 4 at US71.79 cents, up slightly from the previous day.

In London, the April 5 afternoon fix for gold was US$392.05 per oz., a gain of US$9.05 from last week.

Large international gold producer Placer Dome, up 38 cents on the week to $32.50 on a volume of almost 8.6 million shares, figured prominently in a couple of South American developments. Placer announced a takeover bid for International Musto Explorations worth $425 million. At stake is Musto’s 50% interest in the large Bajo de la Alumbrera gold-copper porphyry project in Argentina; Musto has optioned a half interest in the project to MIM Holdings of Australia. Musto gained $1.75 to $12.63.

In Venezuela, where Placer has yet to announce a production decision for its Las Cristinas gold project in the Kilometre 88 region, the government says it will now allow gold miners to export up to 60% of their production. (The Venezuelan central bank will purchase the balance, paying for the bullion in bolivars.) It remains to be seen whether or not the relaxed rules will prod Placer into action.

A company with a producing gold property in Venezuela, Monarch Resources announced an increase in gold reserves at its La Camorra mine and Canaima concession. Monarch, which gained 35 cents to $3.35, is drilling 40 holes to test the deposit to a depth of 500 metres.

News of a potential diamond find in the James Bay Lowlands area of northeastern Ontario gave KWG Resources a push to $4, up 35 cents. KWG and its project partners, Ashton Mining of Canada and ASE-listed Spider Resources, reported the recovery of 230 diamonds (both microdiamonds and macros) from a 71-kg sample at the Kyle Lake project. Ashton jumped 34 cents to $1.15.

Princeton Mining has negotiated a deal with Mitsubishi Materials of Japan to develop the Huckleberry open-pit copper project in northern British Columbia. Princeton slipped 3 cents on the week to 79 cents.

In northwestern Mexico, Azco Mining reported a new reserve figure of almost 1.3 billion lb. of contained copper at the Piedras Verdes project. Azco moved ahead 18 cents to $2.73.

At the Red Lake gold mine in northwestern Ontario, Goldcorp uncovered two areas of mineralization during a preliminary drill program on the lower levels. Goldcorp, which jumped $2.88 to $10.50, has undertaken a $6-million exploration program at the minesite.

Recently pouring its first gold at the rejuvenated Bourlamaque-Nord project east of Val d’Or, Que., was Lithos. The property, known formerly as the Wrightbar project, underwent partial development in the late 1980s. Lithos, which gained 2 cents to 45 cents, was able to take advantage of the stope work and other development to bring the mine into production. Pegasus Gold is planning a takeover of Australian gold producer Zapopan NL by acquiring the 42% interest it does not already own for US$100 million. Pegasus gained $1.38 to $17.75. Zapopan owns the Mount Todd mine, where a $100-million expansion program is in the works.