STOCK MARKETS — Western markets follow senior board plunge

A 1-day, US$14-per-oz. plunge in the price of bullion led to a spate of fear and loathing in the junior gold market.

Gold finished the period ended Sept. 7 down, by more than US$20 per oz., at the US$350-per-oz. level, helping push the Vancouver Stock Exchange resource index down almost 90 points to 1,285.49.

The composite index fared better, edging down a few points at the 1,000 level. Although a drop in the price of bullion from its high in July of US$410 per oz. to the more recent US$370 only slowed speculation in many issues, the latest drop finally shook out some profit-takers (and likely some loss-takers as well).

Prime Resources Group, which is up from the $2 level at the beginning of the year, lost 88 centsto close at $6.12. The company is proceeding with development of its 50%-owned Eskay Creek project in northwestern British Columbia and is considering a business combination with Stikine Resources which owns the remaining half.

Selling pressure pushed Miramar Mining down 85 centsto $4.90. The company recently acquired the Con underground gold mine in Yellowknife, N.W.T., as well as an option on a 50% interest in a copper-oxide project in Cuba. Venezuelan Goldfields also reacted poorly to the bullion routing, dropping $1.50 to $8.12. The company is exploring gold properties in the Kilometre 88 region of Venezuela and is attempting to acquire a 20% interest (from London-based RTZ) in the rich Lihir Island gold project in Papua New Guinea. The PNG government, which wants a bigger stake in the project, and RTZ are discussing the issue. But rumor has it that Vengold could still end the day with a stake in the world’s largest undeveloped known gold resource. The sell-off also hit other juniors active in the now-slightly-stale Kilometre 88 gold rush, including Crystallex International which lost $1 to close at $7.50 and Canarc Resource which hit a low of $2.40 before closing down 20 centsat $2.70.

Crystallex’s joint-venture partner on the Albino concession, Eurus Resource, lost a nickel to close at 95.

Jacqueline Gold, which is exploring the San Lazarus gold project in New Mexico with Toronto-listed BMR Gold, lost 38 centsto close at $1.47. The companies have intersected high-grade gold values in what they believe is a flat-lying structure (although mining analysts believe the drilling runs down vertical structures and therefore view the results as less than significant). A rally in Goldbelt Resources was reversed with the issue finishing down a dime at 60. The company is trying to raise about US$43 million to bring into production a gold tailings project in Kazakhstan.

The sell-off in the golds did not help some of the diamond exploration companies which have been experiencing selling pressure of late. Consolidated Pine Channel Gold, which is searching for diamonds in Saskatchewan, continued to lose ground with a 37 centsdrop to $1.71. Albert Applegath’s Kalahari Resources slipped another 19 centsto close at $1, down from its high of $4 earlier this year.

Plans to proceed with the mining of a 5,000-tonne bulk sample at the Tli Kwi Cho pipe in the Lac de Gras region of the Northwest Territories did little for members of DHK Resources.

Dentonia Resources lost 38 centsto close at $5.50, Kettle River Resources slipped a quarter to $10.25 and Alberta-listed Horseshoe Gold Mining dropped 50 centsto $5.25.

Kennecott, which now has a 40% interest in the project, expects to mine the sample this winter.

Commonwealth Resources has a 5% interest in the diamond project, while Toronto-listed SouthernEra Resources and Aber Resources each have 10%, with the remaining 35% interest split among the DHK group.