Toronto Stock Exchange Small but steady gains help index advance

A spate of buying has crept back in the markets as evidenced by the steady gains in the composite index. Today’s 5.67-pt advance moved the composite to 3,430.15 pts — up 50 pts for the week. Today’s volume was 22.2 million shares. In fact, the advancing index is now only a scant 48 pts off its 1988 high.

The Metals and Minerals index, which is heavily weighted in senior base metal miners, is also reflecting buying — this time spurred by robust commodity prices. The index is also near its 1988 high of 3,226.55 pts. Today’s 10.5-pt drop closed the index at 2,946.9 pts.

The same unfortunately can’t be said of the gold and silver index which continued heading south. Although golds gained 18 pts on the day to 5,692.66 pts, the week’s performance witnessed another decline, this time of or 143 pts.

Bullion, which remained flat at $407(US) on the second London fix, appears to have stabilized above $400 per oz, after a scary dip to the $395 range sever al weeks ago. Despite the advance over $400, gold mining shares continue to be depressed.

A sign of the times in the gold industry has been the rash of mergers completed between the cash rich and the cash poor. The latest is between Pegasus Gold which is lending $12 million to Pioneer Metals. Pioneer was steady at $3.40, Pegasus advanced to $15.50.

Agnico Eagle Mines, which is suffering from operating problems at its Telbel mine in Quebec, slipped to a new low of $12.50 before recovering to $12.88 today. Echo Bay Mines was also easier, closing at a new low of $18.88.

The company, which controls Nuinsco Resources, is putting Nuinsco’s Cameron Lake gold project on the shelf following a negative prefeasibility report from Wright Engineers. Investor response to the news was swift. Nuinsco shares dived from 95 to a low of 50 before recovering to 63 today.

Major golds which advanced included LAC Minerals up at $11.88 and American Barrick Resources which closed at $21.13 — up 50 for the day. Placer Dome Inc. gave up 12 to $15.63.

On the base metals front, Inco Ltd. traded an impressive 297,423 shares, closing at $34.88; off 25 . Inco’s management is facing hostility over a proposed recapitalization and $1 billion dividend plan which requires shareholder approval. The world’s largest nickel miner, Inco had a third quarter profit of almost $200 million. Falconbridge Ltd. was firm at $23. Suitor Noranda Inc. was, trading at $23.38.

Our highflyer, Cassiar Mining, traded at a new high of $5.13 this week, before closing at $5 today. Investors are responding to news of Cassiar’s profitability from asbestos and copper mining operations. With copper prices surging to record highs again this week, Cassiar’s mine in British Columbia is making more money than ever.

Major zinc producer Cominco Ltd. also reacted to booming metal prices, trading at a new high of $22.88 during the week. Today the issue closed at $22.25. The company is planning to bring its massive Red Dog zinc mine in Alaska into production in the early 1990s.

United Keno Hill Mines racked up more losses at its silver mines in the Yukon. The issue slipped to $7. Madeleine Mines was also easier, giving up a nickel to $3.05. The company has acquired a 10% interest in La Fosse Platinum, a grass roots platinum explorer in Quebec. La Fosse was unchanged at 65 .