Precious metals drop, juniors twitch

A significant decline in precious metal prices over the week took the wind out of the junior resource market. The S&P-TSX Venture Composite Index closed at 1,721.79 for the week Dec. 8-14, up slightly from previous week’s close of 1,712.19, but not before dipping well below the 1,700 level over the period. Average daily volumes were below 39 million shares over the session.

Gold saw a major drop over the period, its first in eight weeks and the largest in more than a year, closing at US$435.50 per oz. on the New York spot market, down US$17.50, or almost 4%, from the previous week.

Silver was hit, closing out the session at US$6.69 per oz. on the New York spot market, off US$1.21, or a whopping 15.3%, over the week. Platinum also took a major hit, tumbling US$48 to close at US$828 an oz. Palladium followed suit, finishing the trading period at US$184 per oz., off more than 12%, or US$26, from a week earlier.

In the base metals camp, copper held steady, closing at US$1.40 per lb.; the red metal recovered from a mid-week dip to US$1.35 per lb. Nickel sustained a US$5.85-per-lb. price — pretty much level with the previous week’s close.

The gap between new lows and highs on the junior mining board swelled, with 94 explorers dropping to new yearly lows over the trading period, compared with only 22 companies touching new 52-week highs.

The week’s volume leader was Quebec-based diamond explorer Dianor Resources, with almost 12 million shares changing hands and gaining 11.5 to close at 27 per share, up 74%. The company released positive results from kimberlite indicator mineral sampling on its Cluster project in northeastern Ontario. Analysis of a few hundred collected grains returned abundant indicators, including G-10 garnets, from 21 of the 39 till and sediment samples taken. Geophysics has outlined three areas of circular, airborne magnetic anomalies up-ice from the sample locations. The company also recently closed a $1.2-million financing.

First runner-up in volume trading went to OntZinc, which remained active with 7.4 million shares changing hands over the session. However, the stock lost half a penny to close at 10 per share. The company set the price of its planned $143.8-million public offering of subscription receipts at 7.5 apiece. With the acquisition of Hudson Bay Mining & Smelting from Anglo American, OntZinc plans a 30:1 rollback and a name change to Hudbay Minerals. Additionally, the week saw the company’s CEO, Gregory Peebles, resign following concerns by the Ontario Securities Commission over a private placement taken down by him prior to OntZinc’s acquisition announcement in October 2004.

Third on the volume tally, and percentage leader for the week, was Messina Minerals, which traded 5.7 million shares and posted a whopping gain of 427%, or 64, to finish the week at 79 a share. The company tied into massive sulphides on the Boomerang prospect at its South Tulks volcanogenic massive sulphide project in west-central Newfoundland. Drilling hit 13.9 metres grading 13.6% zinc, 4% lead, 0.7% copper and 102 grams silver per tonne.

Two new coal producers were the top Venture-Board value gainers: Western Canadian Coal rose 90 to $5.80 while Pine Valley Mining tacked on 83 to finish at $5.28.