Juniors reflect gold’s weakness

After making some headway in the previous trading period, Toronto Venture Exchange-listed companies gave back some ground as the U.S. dollar strengthened and the gold price eased on decreasing terrorist fears. The S&P-TSX Venture Exchange index declined by nearly 20 points, or more than 1%, over the trading period Sept. 1-Sept. 7, to close at 1505.62. The period is one day short, owing to Labour Day in North America, when markets were closed.

Meanwhile, the spot price of gold, which began the period on a high note at US$409.50 per oz., lost nearly US$13 an ounce, or 3%, to end at US$396.60 in New York. The weakness resulted from a stronger outlook for the U.S. dollar and the anticipation of Alan Greenspan’s key speech regarding the budget. Precious metals prices were generally hit hard. Silver’s fall was more dramatic than gold’s, hitting a 6-week low and closing down more than 8% to US$6.20 an ounce — a drop of 55 from the previous period. Platinum lost more than 2% to close at US$845 per oz. while its sister metal, palladium, ventured near 2-month lows of US$207.50 per oz.

Copper was trading at US$1.26 per lb., down a few pennies from the previous period; ditto for nickel, which was down 8 to US$5.68 per lb.

New 52-week lows outnumbered new 52-week highs by almost four to one over the trading period. Fifty-six companies sunk to new yearly lows, compared with only 13 reaching new highs.

Topping the volume leaders was Spider Resources, with more than 5.9 million shares trading hands. The company and its partner, KWG Resources, continue to be fuelled by news that six commercially signficant macrodiamonds from two 10-kg samples had been recovered from their property near Wawa, Ont. Spider’s shares closed up 2, to 16, while KWG’s were up 2.5 to 22.5.

Second on the volume charts was JNR Resources. The company tacked on 4 to close at 80, riding news of a pending shortage of uranium, which is driving prices higher. The company that is teamed with International Uranium intersected high-grade uranium while drilling at its Moore Lake property in Saskatchewan, at a time when uranium prices are approaching $US20 per lb. Strathmore Minerals, a Kelowna-based company entirely leveraged to uranium, also made the top 10 list after scoring a $2-million financing for work on its uranium properties. Strathmore topped the value-gainers, adding 25 to close at an even buck on more than 2.4 million shares.

Taking third spot again in the most actives was Shore Gold, with more than 3 million shares traded. The company’s shares were up 21 to close at $2.45 after announcing it had filed its final prospectus for the initial public offering of the spinoff of Shore’s subsidiary, Wescan Goldfields. Shore transferred its portfolio of gold assets to Wescan and will continue to focus on diamonds in the Fort la Corne area of Saskatchewan.

Sunridge Gold and Sanu Resources lost more than 57.5% and more than 37.5%, respectively, to close at 85 and 75. Both juniors have exploration projects in Eritrea, the government of which has instructed them and others to halt any exploration activities on their properties. The move is widely believed to be a response to terrorist threats in the country’s border regions.