Toronto Stock Exchange Inco helps volumes back over 20-million mark

Volumes have started to creep back over the 20-million share mark and tagging along have been prices. Today’s 14.4-pt advance in the composite index moved the index to 3,310.29 pts on volume of 21.5 million shares. We can’t ignore however, that almost 5% of that volume came from Inco Ltd. which traded more than one million shares for the day.

Metals and minerals responded, closing at 2,886.23 pts — up 29.4pts. Golds, which were off more than 80 pts earlier in the day, made a quick about face as the day ended closing up a point at 5,651.28pts. The wild swings in the index reflected a $3 drop in gold bullion to $395.45 on the second London fix. By day’s end, gold managed to actually poke its head above the $400 (US) mark. The show of support for bullion prompted one trader to quip that the gold market “is still alive.”

The leading story all week has been the $1 billion payout by Inco to shareholders in the form of a special dividend. That deal has analysts scratching their collective heads trying to figure out its merits. A vo cal camp has already emerged who are against the deal. With more than $750 million in debt and more coming on to pay for the dividend of $10 (US) per share, many are asking if the company is piling on too much debt at the top of the commodities cycle?

Traders displayed mixed feelings, as the issue remained unchanged at $37.13. On the week, the issue is up over $4. Today’s volume was a healthy one million shares worth more than $37.4 million.

Falconbridge Ltd., which is slowly being swallowed up by Noranda Inc., was also firm at $21.50. Cominco Ltd. was active, closing at $20.13 — up 13 .

Gold issues perked up marginally. Lac Minerals dipped to $12 before recovering to close up at $12.63. At the company’s Page- Williams gold mine at Hemlo, which remains under dispute with Corona Corp., a contractor has been hired to start mining the open pit A zone.

Agnico-Eagle Mines, which has been hitting lows of late, recovered to $13.63. A deal which would have seen Corona Corp. sell its equity position in Franco Nevada to management of that company, has been scuttled due to depressed market conditions. The original offer was set at $9 per share. Franco closed at $7.38 — off 37 .

Placer Dome Inc. was busy at $15.13, unchanged for the day. The big gold miner, which is aiming for one million oz of annual production, has a new president and almost $1 billion for acquisitions. Expect a big one during the next 12 months.

Granges Exploration is starting a test mill program at its joint ventured Mishi project in the Mishibishu area. Milling will take place at the nearby Magnacon mill being built by a consortium led byMuscocho Explorations. Granges was steady at $4. A few miles to the east, Canamax Resources opened its third mine in little more than a year. The Kremzar is expected to yield 32,000 oz of gold per year. The issue was firm at $6.13.

The steal of the year? our front page story on Cassiar Mining queries. You bet. That company is making oodles of money from its copper mine purchased from Newmont at a bargain basement price. The issue gave up a nickel today to close at $4.10.

Traders of Golden Myra Resources are waiting with anticipation results from drilling just completed on the company’s gold project adjacent to Canamax’s Kremzar mine. Talk at the Kremzar opening was of a 6.5-ft section with visible gold. The issue was quiet at $1.15.

Although the company’s financial problems appear solved for the short-term, Pacific Trans-Ocean Resources continued to lose ground, slipping to $1.03. The company has suffered from cost overruns and teething problems at its 50%-owned Ketza River gold mine in the Yukon.