Toronto Stock Exchange Gold index firms despite falling bullion

Buying, however, is selective. Investors are only picking up highly capitalized senior gold producers and remain loath to touch the so- called `emerging producer’ set — the majority of which can be found each week on the new low list.

Overall trading activity continued to improve as the index gained 17.24 pts to close at 3707.44 pts — a high for the year. Volume was healthy at 26.4 million shares.

Hemlo Gold Mines, Canada’s lowest cost producer, was firm at $13.50. According to a front page story, the company hopes to double gold production in the future and the bulk of that, Hemlo says, is expected to come from the company’s interest in the Mishibishu camp, west of Wawa, Ont. Central Crude Inc., which owns a 40% stake in the Eagle River deposit, one of Hemlo Gold’s future mines in the area, traded at a new low of $4.15.

Dumagami Mines shareholders got some good news today. Agnico- Eagle Mines, Dumagami’s major shareholder, has proposed a merger based on 1.7 Agnico shares for each Dumagami share held. Agnico promptly traded to a new low of $8.88 whereas Dumagami’s shares advanced sharply by more than $2 to $14.25 — its yearly high.

Last week we noted that Invesfor, a private investment group in Quebec, demanded two Agnico shares for each Dumagami share. This, Invesfor said, resulted from Dumagami being valued at $14 per share.

Corona Corp.’s A shares were firm at $8 despite low first-quarter earnings. Granges Exploration has terminated its proposed merger with Goldbelt Mines after minority shareholders planned to dissent. Granges said if it proceeded, the deal could have ultimately cost it much more than anticipated.

Also, MIM Holdings, which plans to inject up to $50 million into the company, said it reserved its right not to proceed with the private placement if the Goldbelt deal went ahead.

Some street talk at press time that Falconbridge Inc. has a new base metals discovery near Timmins, Ont., remained unconfirmed. The issue was active at $30.88. Inco Ltd. was also firm at $35.88. Both companies will likely rack up record earnings during the second quarter which ends in four weeks.

Cominco Ltd. was a winner today, advancing 75 cents to $26.37. The company along with affiliate Cominco Resources is considering building a big open pit copper mine in Chile. Cominco is already one of the largest zinc producers in the world.

A short squeeze is hurting some of LAC Mineral’s unit holders. Purchased for $11.75, each unit includes a share and a half share warrant. Some buyers sold LAC shares short hoping to cover their positions with the share in the unit. However, the unit has not been divided and the share in the unit cannot be delivered to satisfy the short account. Result is a squeeze which has sent the unit price up to $12.13 whereas the common traded at $11.

Good platinum values in a drill hole helped International Platinum. The stock was stronger at $1.19. The drill hole came from the company’s Big Trout Lake project in Ontario.

Skyline Explorations continued to suffer as the issue dipped to a new low of $3.75. The company is struggling with low gold prices and a high cost operation in the Iskut River area of British Columbia. Jascan Resources is back in business after a 6-month fight with former partner Atlantic Goldfields. Conwest Exploration bought Atlantic’s 39% stake in Jascan and is the new major shareholder. Jascan was easier at 38 cents .

MVP Capital has seen better days. The issue has been in a freefall, closing at a new low of 32 cents . At the company’s annual meeting, one shareholder quipped that the only people making any money on MVP were management. The company has a portfolio of junior gold shares which makes for one of the sorriest- looking portfolios around.

Senior golds were firm today. Echo Bay Mines advanced to $16.50 whereas American Barrick Resources added 13 cents to $23.87.

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