REYNOLD METALS <RLM> UP ON FURMAN SELZ REPORT
Shares of Reynolds Metals Co rose
sharply after Wall Street firm Furman Selz Mager Dietz and
Birney issued a report focusing on the strong earnings
potential from the company's Australian gold holding, traders
familiar with the report said.
    Traders said the report notes that earnings from Australian
gold holdings could be worth about 35 cts to 55 cts a share
this year and 1.40 dlrs to two dlrs a share in 1988.
    Reynolds Metals rose three points to 59-5/8 on volume of
729,500 shares.
    Reynolds owns stakes in the Mount Gibson gold project and
the Boddington gold project, both located in Australia. An
analyst familiar with the two mines said "the properties,
together, have a potential value of 20 dlrs to 40 dlrs a share
for Reynolds."
    The analyst, who asked not to be identified, said the rise
in the stock today was likely the result of "U.S. investors
that were not completely cognizant of the size or the
importance of the (Reynolds') holdings in Australia."
    Traders said the Furman Selz report indicates that gold was
discovered mixed with bauxite in the Boddington mine.
Boddington is principally a bauxite mine.
    The traders said the report goes on to say that the profits
from the Boddington gold with substantially reduce the
production costs of the other metals mined at Boddington.
    Traders said Furman Selz also boosted its earnings
estimates, expecting Reynolds Metals to earn 4.10 dlr a share
in 1987 and eight dlrs a share in 1988.
    Last year, Reynolds reported net earnings of 8.18 dlrs a
share, which included 3.09 dlrs a share for adoption of new
accounting rules, 1.01 dlrs a share for tax loss carryforwards
and other extraordinary items.
 Reuter
