Venture continues upward climb (October 04, 2010)

Vancouver – The S&P TSX Venture composite index continued its growth streak between Sept. 27 and Oct. 1 with a 45.25 point gain to put the board at 1744.79 points, its highest in almost two years. Trading remained brisk with an average of 145.5 million shares traded daily.

The bulls continue to advance past the bears, with 112 Venture-listed companies hitting new 52-week highs while 70 falling to new lows.

Beaufield Resources was easily the most active stock with 65.5 million shares traded after the company released some impressive drill results from its polymetallic Tortigny property in Quebec. Hole 19 was the real star, intersecting 322.2 metres grading 4.2% zinc, 2.72% copper, 0.19% lead 72 grams silver per tonne and 0.53 grams gold per tonne, though it should be noted the hole was drilled parallel to the hinge of the fold, following the mineralized zone. The company’s stock price was up 27¢ or 150% to end at 45¢, but closed at 68¢ on the day the results were released.

An investment from China’s Xinxing Pipes Group sent Advanced Explorations’ stock skyward, gaining 26¢ or 122.7% to close at 49¢ on 12.5 million shares traded. Xinxing, a major cast-iron pipe manufacturer, has agreed to provide up to a billion dollars towards the development of Advanced Exploration’s Roche Bay iron ore project in Nunavut, as well as $20 million to complete a feasibility study and $30 million in working capital. In return, Xinxing will get a 50% stake in a joint venture to develop the Roche Bay project and a 50% off-take of all iron produced from the project.

Lexam Explorations saw big gains after reaching an agreement in principle to merge with VG Gold. The combined company, to be named Lexam VG Gold, will focus on gold exploration the Timmins area of Northern Ontario. Rob McEwen, currently chairman and chief executive of Lexam, will continue as chairman in the new entity. McEwen will also make a $5-million private placement in the combined company, which, thanks to his already holding 49% of Lexam, will give him roughly 28% of Lexam VG Gold. Tom Meredith, current president and chief executive of VG Gold, will keep those positions in the combined company. Lexam shares were up 47¢ or 84% to $1.03 while VG Gold shares were up 8.5¢ or 17.9% to 56¢.

A bid by Endeavour Silver to buy Cream Minerals led to lots of activity for the junior explorer’s stock. Cream Minerals saw 13.5 million shares traded as its stock price climbed 5¢ or 66.7% to 12.5¢, right in line with Endeavour’s 12¢-per-share cash offer for the roughly 88.3 million shares outstanding. Cream Minerals’ most advanced project is the Nuevo Milenio property in Mexico that has an inferred resource of 5.1 million tonnes grading 1.66 grams gold and 251.09 grams silver.

Rare Element Resources was the biggest value gainer for a second week, up 95¢ or 11.9% to close at $8.90. The company released a scoping study on its Bear Lodge rare earths project in Wyoming that showed an internal rate of return of 40% and an after-tax net present value of US$213 million using a 10% discount. Mine life was set at 15 years with annual production of 11,400 short tons of rare earth oxides. The company’s stock has climbed from $1.94 in late June to its current 52-week high.