Vancouver Stock Exchange Sluggish economy keeps gold down

Lower gold prices are having a very negative impact on the Vancouver market which has still not recovered from the Oct 19 crash. Analysts conclude that forward sales have probably capped gold prices for the near term and Mid- East selling is cited as one reason for the yellow metal’s decline. The U.S. has also lowered interest rates to stimulate its sluggish economy which many feel is slipping into recession.

By presstime the vse index was down two dozen points to 1,110.5 which incidentally is just 8 pts off the 1987 low. Declining issues outpaced advances by three to one in moderate volume.

Two new listings, Cryderman Gold and Richland Mines were the volume leaders today with a turnover of one million and 560,000 shares respectively. They traded at 75 cents and 46 cents . Mahogany Minerals, which has agreed to purchase 65% of Magellan Resources, slipped 12 cents to $2.58. Magellan didn’t do much better, it was off 2 cents to $1.10.

Houston Metals, which is drilling its Silver Queen mine near Houston, B.C. was 5 cents lower at $1.37 and Black Swan Gold slipped 1 cents to $1.10. Production at Black Swan’s Gabanintha gold project in Australia is being expanded to 45,000 oz per year. The company will be entitled to 25% of it.

Over our report period Tylox Resources shot up 46 cents to $1.86 in good volume. The company recently completed two successful oil wells north of Fort St. John, B.C. Murray Pezim’s Golden Nevada also came on strong, jumping 20 cents to $3.30. It’s involved in a significant gold discovery near Faro, Yukon. Chelsea Resources climbed 15 cents to $2.75. The company hopes to double production at its Spotted Horse mine in Montana to 100 tons per day which would yield 2,000 oz gold per month by year end. Omni Resources, which is on Richardson Greenshields analyst David James’ list of buys, inched ahead 5 cents to $2.75 as did Eden Resources which closed at $1.10. The company is negotiating an option on a ruby mine in Mexico.

Forum Resources was the volume leader over our report period with a turnover of 1.6 million shares for a 2 cents rise to 16 cents . The company recently purchased claims near Harrison Lake, B.C.