Gold stocks lose shine as prices plummet

A steep decline in gold prices erased most of the winnings posted by the junior mining sector during the report period ended April 13. The price of silver dropped by more than 7% at the end of the period. The TSX Venture composite index finished 3.6% lower than at the close of the previous week, at 1,813. More than 3% was lost during trading on April 13, when gold fell to a month-long low of US$406 per oz.

Gold’s retreat was triggered by reports suggesting the U.S. economy is stronger than some pundits had predicted. Better-than-expected retail sales and job gains helped strengthen the greenback against the euro to its highest level this year. The notion of a strong economy raised fears that U.S. interest rates might be hiked sooner than expected. Lately, the price of gold and the U.S. dollar have been moving in opposite directions, partly because gold becomes more expensive for buyers using other currencies. But even so, several juniors managed to post gains over the week.

Jaguar Resources topped the list of gainers, closing at 79; that’s 92%, or 38, higher than in the previous report period. Jaguar received assays from 438 samples taken from the first four diamond-drill holes of an eight-hole, first-phase drilling program at its Tocantinzinho gold project in the gold-rich Tapajos region of northern Brazil’s Para state. All four holes cut mineralization, with the best ones assaying 1.84 grams gold per tonne over 170 metres in hole 4, and 1.01 grams gold over 92 metres in hole 1.

Robex Resources was up about 44%, or 26, to close at 85. The company recently received a listing on the Frankfurt Stock Exchange and is busy exploring and developing several properties in Mali. The new listing will enable the company to gain access to global capital markets, particularly European investors seeking to capitalize on the West African gold boom.

High grades of silver over massive widths intersected on the Prieto zone in Mexico’s Durango state drove the shares of Oremex Resources higher by 20%, gaining 23 to close at $1.35 — this, despite silver’s 7% drop in price on April 13.

The volume leaders included ECU Silver Mining and Spider Resources.

ECU Silver’s shares lost 9 to close at 35 after it retracted reserve and resource figures from previous press releases and its web site. Also, the company said a Mexican-based laboratory had been used for three of five recently drilled holes on the Velardena project. Legal proceedings regarding the ownership of the property are ongoing.

Spider Resources and JV partner KWG Resources discovered a new kimberlite pipe on their McFadyen property in Ontario’s James Bay Lowlands. Spider’s shares closed up 3 to 20 on the news that 130 metres of kimberlite had been intersected in a drill hole 8 km north of De Beers‘ Victor diamond project.