Toronto Stock Exchange Inco races tonew high during week-long rally

A 5-day rally which has added more than 70 pts to the composite index, paused today with a small 4.64-pt loss to close at 3,397.72 pts. The rally, which has taken the TSE- composite to a post-crash high, is being driven by relatively thin volumes and generally small daily gains. Gold reacted negatively to expectations that a favorable consensus on the U.S. dollar will come from the G-7 meeting in Washington this week. Any talk of stabilizing the buck is bad for gold, which promptly gave up a few dollars to $449.35(US) on the second London fix.

The gold index reflected the weakness, giving up 100.32 pts to 6,689.61 pts. The metals and minerals index continued to exert strength, as share prices began to react to the reality of high commodity prices. The primary reasons behind the rise are nickel and copper prices, which are at record levels. The index added another 42.1 pts to 2,810.98 pts.

Inco Ltd. was the standout for yet another week, rocketing to a new 52-week high today of $33.25 — up $$1.50 on the day. Volume was 398,000 shares for a value of $12.9 million. Falconbridge Ltd., which is less leveraged to nickel prices than Inco, managed a 25 cents -gain to $23.

Although few experts feel that nickel will remain at levels above $8 per lb for long, few are forecasting prices of less than $3 in 1988. Based on a price of at least $3 per lb, Inco will be able to generate its best profit of the decade. Cominco Ltd. was also better at $19.

The weakness in bullion prices was felt across the board by gold equities. American Barrick Resources gave up 38 cents to $25.75. Echo Bay Mines was also easier, giving up a quarter to $26. Street talk at presstime was that Echo Bay was looking closely at Granges Exploration, the successful mid-sized gold producer and explorer. Granges moved on the rumors to $7 before settling back to $6.88. Neptune Resources, which is still searching for $122 million to build a conventional mine and mill complex in the Arctic, was marginally better at $4.25. We expect to see a major step in to fund this project, if in fact it ever does get financed.

One of the sorrier victims of the Oct 19 crash which has been unable to make any sort of recovery is D’Or Val Mines. The company must hold some sort of loss record when current price is compared to its 1987 high. Today the issue slipped another few pennies to 82 cents , just 2 cents above its low. Last year the issue traded as high as $6.75, which translates into a loss of 87.5%.

Vista Mines was also dropping fast, after racing to a high of $3.40 over the past four weeks. The issue closed at $2.50, down 15 cents for the day and 89 cents on the week. Vista has a small mill near Flin Flon, Man., and plans to process ore from the former producing Rio gold deposit this year.

One company which has managed a respectable recovery is Queenston Gold Mines. The issue was steady at $1.91. President Michael Gray has left and has been replaced by Hugh Harbinson, president of controlling shareholder HSK Minerals. Queenston’s most promising deal is expected to be reached with Lac Minerals shortly. Lac plans to drift into Queenston’s ground from the Macassa mine at Kirkland Lake, Ont.

Lac Minerals, which makes a good takeover candidate, gave up 50 cents to $14.25. Management, which controls little stock, has had its share of disasters in New Cinch and Hemlo.

The problem-plagued Jamestown gold mine in California ap- pears to be getting over start-up pains. The mine is expected to yield 90,000 oz of gold this year, according to Sonora Gold Corp. The issue was better at $6.

Northgate Exploration is taking on a finance role, buying small equity interests in mining companies. The latest is a $5-million investment in Geddes Resources. Geddes is busy with a huge copper deposit on top of a B.C. mountain. Exploration is focusing on a gold- enriched zone. Geddes was steady at $2.90. Northgate, which appears hell-bent on spending as fast as possible its windfall profit from the sale of its Chibougamau mining interests last year, was weaker at $7.75.