Diamonds add dazzle to Venture board

TSX VENTURE EXCHANGE

Vancouver — New discoveries and robust metal prices are the traditional engines driving trading activity among resource stocks on the Venture board, and both were out in force over the Aug. 9-15 report period. Gold prices held steady, even after South African producers settled a labour dispute that threatened to disrupt production. Diamonds added dazzle to the mix and helped push the index to 1,910, for a hefty gain of 71 points over the trading session.

Saskatchewan diamond explorer Kensington Resources was the biggest value gainer, ahead 77 cents at $3.17, based on a merger proposal made by TSX-listed Shore Gold. A merger of the two companies would bring under one roof Shore’s prospective Star kimberlite and Kensington’s 42.24% stake in the Fort la Corne diamond project operated by De Beers. Both Saskatchewan diamond projects are at or near the prefeasibility stage. Kensington shareholders will vote on the proposal in late October.

Forest Gate Resources gained another 3.5 to reach 31, also on the strength of its diamond project in the Fort la Corne district of Saskatchewan. Results are pending from recent drilling of the Dizzy kimberlite on the company’s East Side property.

Bear Creek Mining was the most active issue traded, and the second highest value gainer, over the trading session. The junior posted a 70 gain to reach $3.45 based on impressive exploration results from its 70%-held Corani silver-gold-lead-zinc project in Peru. A syndicate of underwriters recently took down a $10-million bought-deal financing. The company plans to use the bulk of the proceeds to accelerate exploration at Corani. Bear Creek also got a boost after Silver Wheaton announced it had bought 4.8 million shares of the junior at $3.03 per share, “for investment purposes.”

Birch Mountain Resources gained another 61 to reach $4.48 after announcing the startup of its Muskeg Valley limestone quarry in the Fort McMurray region of northern Alberta. The company had previously scoured its Alberta land package for “prairie gold,” but that search proved fruitless.

Frank Callahan-led junior Golden Cariboo Resources was an active trader again this session, up 6 at 17. The company is participating in an oil-and-gas venture in Alberta, and also picked up a gold-lead-zinc project in central B.C.

Recent investor interest in Coral Gold Resources gave the company’s shares a 45 boost to $1.95. The company holds a prospective land package in Nevada near major discoveries made by Placer Dome in the Cortez gold trend.

Investors appear to be keeping Arizona Star Resource in their sights as speculation grows whether Placer Dome will or won’t give the go-ahead for development of the vast Cerro Casale gold-copper project in Chile’s Maricunga district. The company holds a 25% stake in the project, with Placer holding rights to a 51% interest. TSX-listed Bema Gold holds the balance.

The two top percentage gainers — Adobe Ventures and Bayfield Ventures — are involved in resource opportunities in more exotic destinations. Adobe is looking at acquiring a coal project in Colombia, while Bayfield holds ground near Ivanhoe Mines’ Oyu Tolgoi copper-gold deposit. Earlier this summer, Bayfield signed an option agreement giving a unit of BHP Billiton rights to earn a 51% interest in three of its properties in southern Mongolia.