Toronto Stock Exchange Modest gains spurred by U.S. economic data

A week of see-saw trading which recorded three consecutive days of declines, took a turn for the better following news from the U.S. that house sales in February increased by 20.3% — the largest such advance in two years. News like that hammered another nail into the reces sion-scenario coffin.

As a result, today’s activity managed to add 9.48 pts to the composite index, which closed at 3,302.62 pts. In general however, trading during the week has been lacklustre.

Despite all the fears over large gold loans and the emerging surplus in the gold bullion market, prices have managed to hold above the critical $440-mark. The second London fix was $453.75(US) per oz of gold.

The gold index reflected the overall mood with respect to equities, managing a marginal 17.2-pt gain to 6,554.94 pts. Echo Bay Mines remained unchanged at $26 whereas American Barrick Resources scratch ed out a small gain to $26.13 — up 25 cents on the day.

Placer Dome was steady at $15.75 following word it plans to merge its two Quebec affiliates, Kiena Gold Mines and Sigma Mines (see front page story). Several minority share holders have already expressed their concerns to us that the Placer mer ger terms are too low and do not represent fair value. Kiena added $1.50 to $14.25.

The days of easy money in Eu rope appear to be over. Galactic Resources completed a debenture offering there last week, but not without much sweat. Initially offering $45 million(US), the final tally came in at $36 million, with word that the lead manager, McLeod Young Weir ended up with a large piece of the offering on its books. Galactic was up a quarter to $7.

Flanagan McAdam Resources made an impressive gain during the week, adding 75 cents to $3.85. The company holds a 50% interest in the Magnacon gold project west of Wawa, Ont., which is being readied for production in early 1989. The best project in the Flanagan portfolio, production from this low-cost producer is expected to generate considerable cash flow for the company.

Another winner was Faraday Resources which added 60 cents to $4.95. The company chalked up a big gain in earnings in 1987, making $10.8 million. In the previous year, Faraday only made $1.8 million. The $1.68 profit per share includes a small extraordinary item of 34 cents .

A bout of profit-taking took some of the wind out of the booming nickel market. Spot prices, which raced to more than $10(US) per lb on the London Metals Exchange, came back to the $9-range today. The modest drop sparked a sell-off by Inco Ltd. and Falconbridge Ltd. shareholders. Both stocks continued to be volume leaders, trading more than two million shares each during the week.

Falconbridge fell to $22.75, down 75 cents for the day whereas Inco gave up $1.13 to close at $29.50. Hudson Bay Mining and Smelting, which is planning to begin production from its 60%-owned Namew Lake nickel- copper mine in Manitoba later this year, also fell back. The issue closed at $9.25, after trading at a new high of $9.75. Probably the only nickel speculation around, New Quebec Raglan Mines was also easier, closing at $3.85.

The markets are still assessing the situation at Denison Mines following the death of that company’s founder Stephen Roman. His daughter Helen Roman-Barber is taking over the top spot. Last week, the markets added $1 to $6.75 for Denison’s A shares following the news of Roman’s passing. During the week, the price has come right back to $5.88. The jury remains out on Roman-Barber.