Junior mining sector loses ground

The TSX Venture Exchange fell just shy of 100 points during the May 5-11 trading period to close at 1558.69, representing the fifth-consecutive drop. The junior mining sector fared no better, with a whopping 71 Venture Exchange-listed companies reaching new 52-week lows and only eight bucking the trend to attain 52-week highs.

The decline was spurred by the price of gold, which slid to US$377 from US$391.50 per oz. The higher U.S. dollar, which reflects a strengthening U.S. economy, caused investors to run for cover, fearing higher interest rates sooner rather than later. Silver prices tracked gold lower to end the period down 10% to the US$5.50 per oz.

Among the biggest value losers was Silver Standard, which dropped $2.51 to close at $13.03, following the downtrend in silver to which it is highly leveraged.

Northern Dynasty lost $1.65 to close at $4.25, compared with $5.90 a week earlier. The company just began a US$20-million project on its Pebble project in southwestern Alaska. The work is designed to collect data for a bankable feasibility study, to be completed in 2005. The data will be used in applications for permits for the construction of an open-pit gold-copper-molybdenum-silver mine.

Vancouver-based Lumina Copper lost $1.19 to close at $5.70. Lumina recently purchased the Molino mining concession in Peru’s Yanacocha district. Molino is contiguous with the Galeno property, where Lumina has an option to earn a 100% interest. The company recently listed on the American Stock Exchange.

The top value gainer was Western Canadian Coal, which recently entered into an agreement to explore and evaluate the potential of Talisman‘s Sukunka coal licences, in northeastern British Columbia. The company traded up 25 to close at $1.35.

African Gold Group tacked on 20 to close at $1.95, which placed it on the short list of value gainers for the period. The company has entered signed a deal with Columbia River Resources (of which it holds 69%) to earn a 51% stake in the Mankranho licence in return for spending US$1.2 million. African Gold can increase its stake by 34% in return for an additional expenditure of US$1 million. Columbia River has the rights to the Mankranho gold concession, in Ghana’s Sefwi gold belt, which is contiguous with Newmont’s Ahafo project.

Canaco Resources made the list of percentage gainers, as well as value gainers, with a 79% rise to close 23 higher at 52. The company recently became reactivated and raised $350,000 via a private placement. Another reactivated company making gains was Golden Chief, which intends to raise $865,000 by way of a private placement. The company’s main asset is the Confederation Lake property in Ontario. Golden Chief tacked on 9 to close at 28.

Spider Resources, International Kirkland and EuroZinc topped the list of most active stocks for the period.