Gold explorers lose ground as metal slides

Gold’s decline to below US$400 per oz. during the report period April 14-20 took its toll on the junior mining sector.

The rise in the U.S. dollar against the euro continued to erode the prices of precious metals. Silver and platinum were lower, the only bright spot being palladium, which managed to stay flat during the 5-day period. There were also concerns that interest rates would be rising south of the border.

The TSX Venture composite index was down another 2% after losing 3.6% in the previous week to close at 1773. Most of the drop occurred April 13, when it became clear that gold was unlikely to recover to the US$400-per-oz. mark.

Northern Dynasty was the value leader, closing up 80 to $7. The company raised $22 million in March to finance engineering and permitting prior to a bankable feasibility study of the large Pebble project in Alaska. Pebble contains 26.5 million oz. gold, 16.5 billion lbs. copper, and 900 million lbs. molybdenum in an inferred mineral resource of 2.7 billion tonnes grading 0.3 gram gold per tonne, 0.27% copper and 0.015% moly.

Stornoway Diamond added 38 to close at $2.58. The company reported that a 7.4-dry-tonne sample of the AV-1 kimberlite, collected from a surface exposure, returned 6.52 carats of diamonds yielding a sample grade of 0.88 carat per tonne. All diamonds were greater than 0.85 mm, with the biggest weighing 0.4 carat. Other value gainers included European Goldfields, up 40 to close at $3.80. The company recently completed the latest phase of drilling on its 80%-owned Certej project in Romania.

For the second week in a row, Texas-based Jaguar Resources made the list of percentage gainers, volume leaders, and value gainers. The company added 39% to its value to close at $1.10 (following the previous week’s 92% gain). It would appear that excitement over the comany’s initial drill results has not waned. Those results included 170.2 metres grading 1.84 grams gold per tonne at the Tocantinzinho project in the Tapajos region of northern Brazil. The company was known as Star Resources until last September.

Appalaches Resources rose 33% as it continued to explore the Mont-de-l’Aigle property in Quebec’s Gasp region, as well as the Lac Mchant property, which is prospective for Olympic Dam-type copper and gold. Melkior Resources gained 41.6% to close at 17. Recently the company acquired the Launay II property in Quebec, which it will soon explore.

Spider Resources topped the most-active list. The company and its joint-venture partner, KWG Resources, recently discovered a new kimberlite pipe on their McFadyen property in the Attawapiskat property in the James Bay Lowlands of Ontario. Spider’s shares closed at 18. The new kimberlite was intersected about 8 km north of De Beers‘ Victor diamond project.

Also active was EuroZinc, which announced a $100-million debt financing for its Somincor acquistion. Somincor owns the Neves Corvo copper mine in Portugal. EuroZinc’s shares were up a penny to 61.

ECU Silver made the active list as well, having risen 3 to close at 37 after losing ground in the previous week following the company’s retraction of some reserve and resource figures.