Toronto Stock Exchange (October 21, 1991)

Riding on lower interest rates, a firmer gold price and share price advances in New York, the Toronto market rallied to post its largest one-day gain for several months during the week ended Oct. 15.

Interrupted only by the Thanksgiving long weekend, Toronto’s 300 composite enjoyed a 4-day winning streak that continued to gather steam as institutions unloaded some of the cash they have been sitting on for the past few months. Fuelled by the inevitable herd mentality, the composite 300 charged ahead by 46.3 points today, Oct. 16, after 26.14 million shares worth $304 million changed hands. The big increase came on the back of the previous day’s 41.25-point upswing which was the largest since March 5. Not surprisingly, it was the blue chip stocks that benefited from the renewed appetite for equities.

Topping the active list was Inco, which shot by US$4 during the report period on a volume of over 1.7 million shares. Analysts predict that an economic recovery will mean further increases in the big nickel miner’s share price. Sherritt Gordon, the week’s second largest trader and with one million shares, has garnered attention due to a Cuban nickel deal designed to fill vacant capacity at its Fort Saskatchewan refinery in Alberta. But new management hasn’t yet fulfilled a pledge to get the issue up beyond this week’s $7.13 trading level. Sherritt Gordon was up 13 cents today. Among other base metal blue chips, Cominco added $2.76 this week on comparatively light trading, while Noranda shot up $1.38 to $18.13 as 350,000 shares changed hands.

While a spate of profit taking prevented gold from reaching US$360 per oz. this week, Placer Dome ranked third on the active list. Today’s 25-cent advance in the price of Placer Dome shares added up to a $1.13 increase over the report period.

After hitting US$359 earlier this week, the yellow metal retreated to close at US$356.55 in London. Other active stocks in the gold sector included LAC Minerals which added 38 cents and Royal Oak Mines. Looking for high-grade ore to feed its Pamour No. 1 mill near Timmins, Ont., Royal Oak recently intersected an ore-grade gold zone at the nearby Shumacher mine. Highlights from three holes include 12.3 ft. of grade 0.19 oz. gold per ton and 2.9 ft. of 1.35 oz. Royal Oak edged up nine cents to close at 90 cents. Fort Knox Gold Resources retreated slightly from 44 cents to 37 cents despite rumors that the 40% owned Inco affiliate has intersected 68 ft. of average 1.5% nickel and 1% copper on a 77-claim property near Cobalt, Ont. Similar rumors concerning a Kirkland Lake, Ont., gold property optioned by Queenston Mining to Battle Mountain Gold has kept Queenston shares on the active list for the past two weeks. But as investors wait for results to support the rumor, the issue has slipped to 98 cents from $1.11 last week. Clive Johnson, president of Bema Gold, was in Toronto recently to discuss his company’s progress in obtaining its share of financing for the 50% owned Refugio heap leach gold project in Chile. So far, the mine’s finance arm of London banker Kleinwort Benson has committed to fund 20% of a US$75-million syndicated bank loan and information packages have been sent to another 70 banks.

Evidence that investors are being cautious was a 1-cent decline this week in the price of Bema shares. The issue closed today at $1.74, down from a high of $4.

The least surprising news of the week was an announcement from Madeleine Mines that the company’s Oct. 15 annual meeting in Montreal has been postponed for the time being. Representatives of Oklahoma-based Kaiser-Francis Oil are still doing due diligence work on the company after purchasing a 32% controlling interest and more announcements are expected. Propelled by this week’s US$9-per-oz. increase in the price of platinum, Madeleine advanced to $3.13 before sliding back today to $3. At an annual meeting in Montreal this week, Freewest Resources President Mackenzie Watson blamed government bureaucracy and a claim dispute for stalling exploration at the Benoit gold project

in northwestern Quebec. Freewest edged up five cents today to $2.75 after a quiet week.