Business

It was just a flash in the pan

Tom Hopkins,Ian Brown November 20 1978
Business

It was just a flash in the pan

Tom Hopkins,Ian Brown November 20 1978

It was just a flash in the pan

With fall drawing to its golden close, an ending of a different intensity grips Canadian gold mines with the price of an ounce of gold down to $206 last from its $245 Oct. 30 record high. The cause: A United States Treasury announcement that it would unload 1.5 million ounces in December— five times the usual monthly amount, and almost as much gold as Canada produces in a year—from its 280-millionounce reserves in an attempt to make the American dollar more attractive to investors.

That plunging price may have taken with it the expansion plans of companies like Northair Mines Ltd. and Du Pont of Canada Exploration Ltd. in British Columbia; Amoco Canada Petroleum Co. Ltd., Pamour Porcupine Mines, Ltd. and Little Long Lac Gold Mines Ltd. in Ontario and Quebec.

If gold prices stay above $180, those companies and others will continue to study the reopening of ore bodies and mine.s closed after the dream days between 1934 and 1940 when more than 100

Canadian gold mines produced as much as five million ounces of gold a year ( 12 per cent of world total). With shares of venerable DomeMinesLtd —the oldest gold mine in the country—plunging from more than $100 to $83 in three weeks, one Vancouver analyst was predicting gold had hit its peak. His Toronto counterparts were just as cranky, reflecting the industry's inherent conservatism: “This is the first time we’ve been over $200 for any period of time,” he says. "Most people fear we’re just coming to the top of a two-year up cycle, and are about to go into a two-year down.” If the expansion plans fall through, there will be little hope for the industry because, according to Bo McCloskey, a , director and assistant secretary treasurer of his father’s company, Madsen Red Lake Gold Mines Ltd , “There is next to no new prospecting going on.” Little hope, that is, save the healthful B C. splashings of placer-prospecting hobbyists. Vancouver mining exploration equipment supplier Doug Elsdon has sold more than 2,000 placer pans in the last year and teaches eight night-school courses in placer mining. “There are more people looking for gold now,” he says, “than during the gold rushes." The rush of 78, however, has become but a wait for 79.

Tom Hopkins/Ian Brown