Juniors rally on strength in metals sector

TSX VENTURE EXCHANGE

Junior mining stocks trended higher over the trading period Feb. 16-22 on the strength of precious and base metal prices. The TSX Venture Exchange was up 63.13 points, or 3.3%, to finish the period at 1956.06.

Precious and base metals gained as the greenback weakened against major currencies. New York spot gold rose US$9.60, or 2.2%, to close at US$435.20 per oz. The lower U.S. dollar was sparked by South Korea’s plans to unload some of its U.S. currency reserves, which are worth $200 billion. The U.S. consumer price index was also down, compounding the weakness in the dollar. Silver followed gold higher, gaining 19, or 2.5%, to close at US$7.53 per ounce. Platinum was up 2.3%, or US$20, to close at US$870 per oz., while palladium remained unchanged at US$183 per oz.

Among base metals, zinc managed to add to its impressive gains of the previous week, tacking on 2 to close at more than 62 per lb., while copper added 3 to close at US$1.51 per lb., for a gain of 2.5%. Nickel finished at US$7.16 per lb., or 6 higher.

For the first time in recent memory, more companies reached new 52-week highs on the venture exchange than reached 52-week lows (63 versus 58).

Topping the most-active list was Palladon Ventures, which traded more than 8.7 million shares and closed up 67, to $1.20 (a 126% gain). The company announced it was acquiring Iron Ore Mines‘ portfolio of properties in Utah for US$10 million.

With more than 6 million shares trading, China Diamond placed second on the most-active list. The company closed even at 12.5. Under an agreement with a government agency, China Diamond will have more access to gold-copper exploration opportunities in Shandong province.

Spider Resources was third on the most-active, with more than 5.5 million shares trading hands. The company’s shares were down 1.5, to 19, peaking at 23 over the period. The company and its joint-venture partner, KWG Resources, announced assay results for the first two holes of its winter drilling program at McFauld’s Lake. Hole 58 hit 9.2 metres grading 5.7% copper, and Hole 59 hit 8.5 metres grading 7.9% copper. The massive sulphide mineralization is similar to that found in hole McF-04-57, where 18.8 metres of 8.02% copper were reported last fall.

Fourth most-active was Continuum Resources, which rose 6 to close at 32 on a volume exceeding 4.5 million shares. The junior released results from chip-channel sampling along 40 metres of the new Level 6 sill, and from the hanging wall of the Bonanza Vein at its San Jose project in southern Mexico. The hanging wall sampling averaged 10.2 grams gold and 1,102 grams silver per tonne over 2.26 metres true width. The company is preparing to drill its nearby Natividad deposit from underground as well.

Majestic Gold gained 20 to close at a high for the year of 95 on more than 4 million shares. Encouraging geochemical results were reported from channel sampling of the level 4 underground workings of the Fekenyun mine in China’s Shandong province. Two sub-parallel drifts 250 metres below surface yielded 103 metres grading 2.2 grams gold along the southern drift and 60.2 metres of 0.58 gram in the northern drift.

Uranium explorer JNR Resources traded 3.6 million shares, and shed 9 to close at $1.24.