STOCK MARKETS — Lacklustre gold price hampers western

Gold failed to provide a bounce during the week ended Sept. 14, pausing only momentarily at the US$350-per-oz. level before slipping US$5 per oz. to the US$345 level.

The 180 degree turn in sentiment for gold, coupled with a lack of news on the diamond scene, left western markets hurting.

The Vancouver Stock Exchange resource index lost more than 83 points (or about 6.5%) to close at 1,201.77 while the composite index shed 42.18 points to finish at 958.09.

Following a 4-day trading halt, Goldbelt Resources announced it had signed an agreement in principle with Toronto-listed Pegasus Gold on the company’s gold and silver tailings project in Kazakhstan. If a due diligence review is positive, Pegasus may lend Goldbelt up to US$18.4 million for the project as well as assist in securing the remaining financing.

The loan is convertible at 65 cents per share and could result in Pegasus owning more than 60% of the company.

Midway through the trading session today (Sept. 15), Goldbelt was unchanged at the 60 cents level.

Sellers hit Pacific Sentinel Gold, pushing the issue down 70 cents to $2.55 after the company released preliminary starter pit reserves for its Casino project in the Yukon. The company estimates preliminary reserves in the supergene and hypogene zones of 99 million tons grading 0.40% copper and 0.014 oz. gold. A local mining analyst (who declined to be named) believes the company will need a higher-grade starter pit to make up for the project’s remote location.

Taseko Mines, which is promoted by the same group, also lost ground, after announcing plans to proceed with a detailed prefeasibility study on its Fish Lake copper-gold project southwest of Williams Lake, B.C.

The issue hit a new low for the year of $9.63 before recovering to $11 for a net loss of 75 cents on the week.

The release of drilling results from a new zone on the Meliadine property, owned by Cumberland Resources and Toronto-listed Comaplex Resources, had little effect. One hole intersected 0.32 oz. gold over 6.3 ft. and 0.31 oz. gold over 22.3 ft., while the other returned 0.23 oz. gold over 90.5 ft. including 0.42 oz. gold over 13.3 ft. and 0.27 oz. gold over 23.6 ft. Cumberland lost 15 cents on the news to close at 55 cents.

Akiko Gold Resources bucked the downtrend with a 21 cents gain to $1.75. Hemlo Gold Mines expects to begin drilling shortly on a new gold zone at the White River project in northern Ontario.

Gold Giant Minerals, Akiko’s joint-venture partner on the project, added 10 cents to close at $2.40.

Alberta-listed Mill City Gold Mining, Tanqueray Resources and Fibre-Klad Industries all gained ground after announcing kimberlite intersections on the first two drill holes at their Yamba Lake property in the Northwest Territories.

The two holes were drilled under a large lake into a geophysical anomaly and returned 455 ft. of kimberlite in the first hole and 373 ft. in the second. The companies stated that a visual inspection of the core from the holes reveals a significant amount of indicator minerals.

Mill City closed up 10 cents at 60 cents while Tanqueray gained 25 cents at $1.44 and Fibre-Klad added 25 cents to finish at 85 cents.

Other diamond-related issues did not fair as well.

Members of the DHK group all lost ground with Dentonia Resources down 70 cents at $4.80, Kettle River Resources off $1.25 at $9 and Alberta-listed Horseshoe Gold Mining down 80 cents at $4.55.

Kennecott recently announced plans to mine a bulk sample from the group’s Tli Kwi Cho pipe in the Lac de Gras region of the Northwest Territories. Kalahari Resources, which has a large ground position in the area, continued to lose ground with a further 20 cents drop to 80 cents.

Consolidated Pine Channel, a large player in the search for diamonds in Saskatchewan, also added to previous losses, finishing down 41 cents at $1.30.