Curragh shares are battered by Westray coal mine disaster

As rescue workers pulled more bodies from the depths of the Westray coal mine in Nova Scotia today, May 13, Curragh Resources continued its free fall, dropping 5 cents to $3.10.

The latest decline follows two previous days of selling that shaved $1.25 of the share price.

Analysts say the mine disaster has tarnished Curragh’s image, making it difficult for the lead-zinc producer to secure much-needed financing for new projects.

Curragh is currently negotiating with the federal government for a $40-million loan guarantee to develop new ore at its Faro mine in the Yukon. It also needs to raise $140 million to cover development costs at the Stronsay lead-zinc project in British Columbia.

While tragedy hit the East Coast, Murray Pezim fans on the West Coast were celebrating a victory for the famous promoter, who convinced the court to throw out a case brought against him by the B.C. Securities Commission. With the “Pez” back in action, the beleaguered junior gold market may get a much-needed lift. But, so far, gold has given little indication that it will co-operate. After a moderate rise to over US$336 per oz., the yellow metal had dropped back to US$335.20 in London this afternoon.

Producers showed some life during the report period, including American Barrick Resources, which gained 25 cents today to $29.63, and LAC Minerals, which picked up 13 cents to $7.63. But the weak gold price has prompted Placer Dome to initiate a severe cost-cutting program at its operations, and may force the producer to curtail production at certain mines, said President Tony Petrina at the company’s annual meeting.

Placer, which shed 13 cents to $12.38 today, realized net earnings of $11 million (5 cents per share) in the first quarter, compared with $15 million (6 cents per share) during the same period last year. During the week ended May 12, Central Crude regained a modest 3 cents after slipping to a 52-week low of 47 cents. At a board meeting following the company’s annual meeting, Hemlo Gold Mines’ Joe Baylis replaced promoter Richard Nemis as president of the company, signalling the end to the latter’s fight to have the Eagle River gold project placed into production.

Hemlo, which holds interests in both Central Crude and the Eagle River project, closed up 13 cents to $8.38.

Other annual meeting announcements included Wharf Resources’ acquisition of a 60% interest in the Golden Reward mine in South Dakota from MinVen Gold (TSE). Wharf closed up 13 cents at $5.25 in a 52-week range of $4.90-6.38 while MinVen almost doubled in price from 25 cents to 41 cents. Shareholders of Boston Bay Mines (CDN) saw their share price jump 80 cents to $3.50 during the week after Madeleine Mines announced it would acquire the remaining 50% of the Lac des Isles palladium-platinum mine near Thunder Bay, Ont., from the Sheridan Platinum Group. Boston Bay has a 90% interest in the Sheridan Platinum Group.

Another over-the-counter company, Belleterre Quebec Mines (CDN), which has a 40% interest in Boston Bay, moved up to 50 cents bid while Madeleine dropped 15 cents to $3.40.

Platinum and palladium are trading at about US$352 per oz. and US$84 per oz. respectively, compared with US$392 and US$94 at this time last year. International Platinum says it has raised $302,500 to pay for the acquisition of a 51% interest in a platinum project within the Bushveld Complex in South Africa. The junior moved up 4 cents to 19 cents on the news.