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Gold/Mining/Energy : Donner Minerals (DML.V) -- Ignore unavailable to you. Want to Upgrade?

To: Steve Joy who wrote (8854)	11/7/1998 1:42:00 PM
From: Gord Bolton	Read Replies (1) \| Respond to of 11676

This could explain some renewed interest in SVB. Inco shares continue rally on nickel market hopes TORONTO, Nov 6 (Reuters) - Shares of Inco Ltd. , the Western world's largest nickel producer, continued to climb on Friday as bullish investors speculated that sluggish metal markets would soon rebound. Inco shares rose C$0.80 to close at C$20.05 in heavy trading on the Toronto Stock Exchange on Friday, capping a 50-percent rally for the blue-chip stock over the past five weeks. Toronto-based Inco's stock hit C$12.50, near 12-year lows, this past summer as base metal prices plummeted and financial turmoil swept through Asia and other emerging markets. Asia accounted for 35 percent of world nickel consumption just three years ago, but the region's appetite for metal fell precipitously with the onset of the Asian flu. Analysts said a recent round of interest rate cuts in the United States and an improved global economic outlook were spurring a comeback for key commodities and cyclical stocks. The U.S. Federal Reserve has lowered interest rates by 50 basis points since September 29 in a bid to support the domestic U.S economy and assuage fears of a global financial meltdown. "Interest rate cuts and a little bit more comfort about the economy overall has led to a rebound," said Richard Aldrich, analyst with Lehman Brothers in New York. Nickel production cuts, signs of lower Russian supply and a strike at the world's fourth-largest nickel mine in the South Pacific have also helped to bolster confidence in the nickel market. Workers at two mines belonging to Eramet SA in New Caledonia recently walked off the job, stoking hopes of a contraction in nickel supply. Nickel traded at $1.95 a pound on the London Metal Exchange on Friday, down from a 1997 high of $3.72 a pound. "The strike in New Caledonia just happened to be at the right time to boost the psychology. I don't find it materially or fundamentally important," said Terence Ortslan, an analyst with TSO & Associates of Montreal. Like most mining companies, Inco has been hard hit by the glut in the nickel market and the refusal of most producers, including itself, to cut production. Inco lost $24 million, or $0.18 a share, in the third quarter of 1998, compared with earnings of $5 million, or a loss of $0.02 a share, in the same period last year. Despite its improved share price, a cloud still hangs over the financially embattled company. Analysts continue to express doubts about Inco's C$4.3-billion Voisey's Bay nickel project in Labrador, Newfoundland. Talks between the company and the Newfoundland government were suspended in July after the two sides failed to reach an agreement on development of the mine. Newfoundland Premier Brian Tobin has said his government will not issue a mining license for Voisey's Bay until the company agrees to process ore in Newfoundland, a plan that Inco says no longer makes economic sense. My comments. More nickel especially of high grade would improve the outlook for a the entire project. The dynamics of the whole play have changed significantly in the last few weeks. If some were waiting for the right time to announce some success, this might be the right time. Good luck.