European currency turmoil lifts gold mining issues

Gold emerged as a winner during the week ended Sept. 15, jumping US$4 to US$345.70 per oz. in New York as mayhem gripped European currency markets.

Shaken by the volatility that followed a half-a-percentage-point cut in German interest rates, investors took shelter in the gold market. The yellow metal continued its advance today, Sept 16, closing in London at US$349.00. Gold stocks followed the upward trend, with American Barrick Resources, Pegasus Gold and Golden Star Resources touching new highs of $38.63, $21.50 and $5.75 respectively.

Today, Barrick moved up another $1.25 to within cents of its all-time high of $40. The gold index shot up by 183.21 points, while the TSE 300 composite index lost 10 points.

Trading 3.5 million shares, Placer Dome closed at $12.88 for a 25 cents gain on the week. Geological resources at the company’s Porgera mine in Papua New Guinea have recently been increased to 130.4 million tons grading 0.14 oz. gold per ton. Placer added another 62 cents to $13.50 today. Almost doubling in value to 73 cents, Scintilore Explorations has been granted a trial for its lawsuit against prospectors John Larche and Donald McKinnon, as well as Teck, the former International Corona and Hemlo Gold Mines. The company alleges claims staked by the two prospectors around the present-day Hemlo mines were done on behalf of Scintilore.

Hemlo Gold Mines gained 13 cents to close at $10.13, while Teck edged up 25 cents to $22.25.

Having agreed to pay $70 million for Chevron’s mineral interests in Ireland, including a large lead-zinc deposit, Lac Minerals picked up 38 cents to $8.88. Lac also announced that an underground extension at its Bullfrog gold mine in Nevada had reached a milling capacity of 825 tons per day. Lac gained another 12 cents to $9 today.

Gold miner Fairfield Minerals, which just shipped 600 tons of high-grade gold ore to Noranda Minerals’ Horne smelter in Quebec, picked up a nickel to $1.45. Diamond stocks were also active, but most closed lower after VSE-listed Dia Met issued an update on its Lac de Gras drilling program. The junior, in a joint venture with BHP Minerals Canada, has found nine new kimberlites on the property, at least one of which is diamond-bearing. Saying much more information is available than has so far been released, some analysts called the announcement misleading.

Those involved in the Lac de Gras play include Aber Resources, down 2 cents to $2.18; Lytton Minerals, down one penny to 30 cents; Pure Gold Resources, down 2 cents to 16 cents; and SouthernEra Resources, unchanged at $1.80. Trading more than four million shares, Westfort Petroleums gained 2 cents to 10 cents.

A headline reading “Secret diamond plant near city” recently graced the pages of Saskatoon’s Star-Phoenix newspaper. The story states that Monopros is using a mobile plant to process samples from a diamond project held by Uranerz and Cameco , where two rigs are reportedly turning 24 hours a day. Cameco lost 50 cents to $15.38.

Standing out among the diamond stocks were African explorers United Reef Petroleums and its affiliate Canhorn Mining, which both continued to set new highs. After trading almost 3.4 million shares, United Reef closed up 6 cents at 41 cents. Canhorn gained 8 cents to 50 cents.

International Mahogany advanced by 3 cents to 87 cents. The junior has entered into a joint venture with the owner of the Santa Rosa copper mine in Chile. In order to earn a 51% interest in the deposit, Mahogany must advance up to US$250,000 for exploration and development and deliver a feasibility study by Sept. 30, 1993. The owner has been recovering high-grade ore in a small mining operation. Mahogany estimates the deposit may contain reserves of one million tons grading at least 1.7% copper.