Juniors see glimmer of hope on increased volumes

TSX VENTURE EXCHANGE

A few bright spots on the junior mining horizon are offering hope to those still remaining in the trenches during the prolonged slump in market activity. Over the May 31-June 6 trading period, average daily trading volume on the TSX Venture Exchange nearly doubled that of the week before, climbing to 56.6 million shares. In another sign that interest is returning to the beaten down sector, the S&P-TSX Venture Exchange Index finished up 2% to close the period at 1,677.27.

Still, more than seven times as many mining companies on the Venture Exchange reached their 52-week lows as achieved their yearly highs — 15 versus 108.

Leading the charge in the most-actives was Entre Gold with 5.2 million shares traded. The company continues to reap the rewards of Ivanhoe Mining‘s successful drilling campaign at Copper Flats next door to Oyu Tolgoi. The real kicker is that drilling of the colossal copper-gold deposit not only shows continuation, but appears to be getting richer and wider on Entre’s ground. Entre gained 33% or 47, finishing at $1.93, a year-high for the Vancouver-based junior.

Second most-active was St. Elias Minerals, which traded over 4.4 million shares, giving back 11 to close at 30. Maybe there was some profit-taking after last week, when the company was the top trader and gained 183% after intersecting three veins, presumed to carry gold, at depth at the company’s Jales Gralheira project in Portugal.

Toronto-based Sparton Resources gained 5.5 on volume of over 2.2 million shares, to close at 14 — an increase of 65%. A new valuation of its 6% interest in the Chebucto natural gas field off the shores of Nova Scotia reflects the higher prices in natural gas. Based on a start-up in 2012, the company’s share of net present value tied to future production is $3 million at a 30% discount rate, $88 million undiscounted.

North American Tungsten slid 22 to close at $1.20 on a volume of nearly 1.7 million shares. The company recently appointed Dennis Bergen, a mining engineer, as general manager for its Cantung mine in the Yukon. Pierre Erni, a private investment banker from Geneva, was appointed as an advisor.

Lakeshore Gold surrendered 3 to finish at 82 on a volume of 1.7 million shares. Lake Shore’s resource expansion drilling at Timmins West confirms that the mineralization extends another 450 metres past the current indicated resource. Intercepts of 24 grams gold per tonne over 11.1 metres and 13.6 grams gold over 2.1 metres provided the encouragement.

Orko Gold was up a nickel on 1.6 million shares and finished at 32. The company recently raised more money for drilling on its La Preciosa property in Mexico’s Durango state. Plans call for 5,000 metres of drilling after the first hole intersected two veins carrying very encouraging levels of silver and gold last month.

Birch Mountain Resources added a hefty 39 to finish at $2.85 on 1.6 million shares. The company holds mineral rights in the northern Athabasca region and says there are industrial and metallic minerals lying beneath the oil sands.

Value gainers were topped by Seymour Exploration and Silvercorp Metals which tacked on 81 and 61 respectively.