Queries More to Borealis share price than short selling

As you say, Borealis Exploration (ASE) has dropped considerably during the past couple of years. It was trading recently at $2.66 on the Alberta Stock Exchange compared to $19 a year ago.

While President Rodney Cox told The Northern Miner that his company has been the victim of short selling, there appears to be other reasons for the issue’s decline.

Owing to the fact that Borealis shares are tightly held within the company, the issue has traded (until recently) at a much higher level than other companies with similar assets.

So when the current market malaise and a drop in the price of gold to around $390(US) per oz from an average of $437 in 1988 combined to play havoc with almost the entire junior resource sector, it is hardly surprising that Borealis was affected.

When junior explorers make a production announcement at the projects they are involved in, the announcement is usually accompanied by an increase in the company’s share price.

Through a subsidiary, Borealis was attempting to bring its Fat Lake gold deposit in the Northwest Territories into production this year at the rate of 5,000 tons per month or 15,000 oz annually.

As reported (N.M., Sept 12/88) proven reserves to a depth of 220 ft stand at 52,500 tons grading 0.325 oz gold per ton.

But a financing agreement which would have given Borealis $5 million by October 1988 for the project recently fell through. As a result, mining activity at Fat Lake has been halted until Borealis can find a joint venture partner or come to an alternative financing arrangement.

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