Toronto Stock Exchange Aur, Louvem hit new highs before trading

The surge in buying came on street talk that another significant drill hole had been completed by Aur on Louvem’s property near Val d’Or, Que. The hole is rumored to be in excess of 400 ft of massive sulphides.

News that the inflation rate in the U.S. continued to slow, took a bit of the wind out of gold’s sails. The second London fix was set at $370.70 (US) per oz. The easing inflation news prompted selling in senior gold equities — action which was reflected in the gold and silver index which fell by 1.44% or 88.48 pts to 6049.62 pts.

Most senior golds felt the pinch. American Barrick Resources gave up 62 cents to $30.88 whereas LAC Minerals closed lower at $12.38. Despite today’s weakness, the gold sector appears to have built a firm base at $360. Many analysts believe this represents a bottom for bullion.

The composite index added 19.29 pts as non-mining issues reacted positively to the U.S. inflation rate. Lower inflation suggests that bank interest rates will be allowed to ease in the future — a positive development for most equities.

Metals and minerals were also strong, bounding by 19.64 pts to 3308.75 pts. Noranda Inc. was unchanged at $23. Falconbridge Ltd. was better at $28 on volume of 235,000 shares. The company released its second-quarter results which showed a profit of $93 million or $1.40 per share. First half profits totalled $259 million.

Results for the period are still forthcoming from Inco Ltd., the world’s largest producer of nickel. With nickel prices remaining at near record levels, another quarterly profit record is anticipated. Inco was easier at $34.44.

Cominco Ltd., which is rumored as a buyer of Aur Resources shares, was up a fraction to $26. The company is the world’s largest zinc producer.

Asbestos Corp. continued to take a beating, plummeting to $5 on thin volume. Controlled by the government of Quebec, the company is suffering from news that all asbestos use in the U.S. will be banned in the near future. Before the news, Asbestos Corp. was firm at $8.50.

High River Gold Mines responded to news that Inco Gold had drilled a strong hole at its Snow Lake mine project in Manitoba. The issue popped to $1.50 before easing back to $1.38 on volume of more than 275,000 shares. The property could be in production by late 1990.

Drilling to test for the extension of mineralized zones at Goldex Mines’ property in Quebec yielded positive results. The issue was firm at $2.3 5. Goldex is in the Paul Penna group of companies.

Madeleine Mines made a gain to $2.95. Last April, the issue hit a brief high of $6.75 following news of a cold fusion experiment by two Utah scientists. This week’s trading brought the issue right back to where it started just before the cold fusion excitement was initiated. Production from the company’s platinum group metals property in Ontario will likely begin sometime next year, well behind Madeleine’s original schedule.

Investors took a collective yawn after digesting the news from Audrey Resources that Minnova Inc. plans to fund $10 million of work on Audrey’s 1100 deposit in Quebec. The issue was a dull performer at $3.45. Despite the disinterest, Audrey has an immense reserve base which will likely allow the company to produce zinc, copper and gold well past the year 2000.

Golden Star Resources was also active, making gains to $3.10. The company has a gold deposit in Guyana which is under the supervision of Placer Dome.

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