STOCK MARKETS — Diamond exploration interest sustains

Western markets enjoyed a relatively buoyant month in November, particularly the Vancouver Stock Exchange where all measures of market activity rose along with stock prices.

The turnaround can be largely attributed to investor interest in diamond exploration, and expectations are this interest will remain strong now that Dia Met Minerals and BHP Minerals Canada have announced results from nine new pipes on their joint venture claims near Lac de Gras, N.W.T. Mining analysts wasted no time crunching numbers after the new results were released, and noted that two of the pipes have better initial grades than the original Point Lake pipe discovery, especially in the important category of macrodiamonds.

The diamond-related rally continued through our report period ended noon today, Dec. 9, with the VSE’s resource index gaining a healthy 92.5 points to 698.71. The composite index followed suit, and gained 30.9 points to 613.98 from a week ago.

Diamond explorer Commonwealth Gold took top spot on the VSE, gaining a modest 4 cents to $1.19. The company and its two TSE-listed partners are still taking some good-natured ribbing for their “canary-yellow” diamonds from their Lac de Gras area project which turned out to originate from the drill bit. More results are awaited from the joint venture drilling, and analysts have no doubt this mistake won’t be allowed to happen again. Lytton Minerals, a top trader on The Toronto Stock Exchange, reported that resampling by the Saskatchewan Research Council (SRC) and subsequent processing by SRC’s lab confirmed its original finding of anomalous samples from its Lac de Gras area property. Doubts about the quality of the original work eased, particularly as the company does have an attractive land package and a renowned diamond expert, Raymond Davies, on board to oversee exploration activity.

Not much has been heard from Murray Pezim of late, but this may change now that the high-profile promoter is gearing up to get into the diamond exploration business. Pezim junior Golden Dividend Resources was an active trader after announcing it was preparing to acquire a property in the Lac de Gras region, although the issue lost 1 cents to 19 cents during our report period. Pezim’s Golden Ring Resources got a bigger boost, up 11 cents to 33 cents, after making application for a prospecting permit of about 1.29 million acres in the Peace River area of northern Alberta. This region is attracting considerable interest from diamond exploration companies. Skyline Gold continued its amazing comeback over our report period, gaining an impressive 58 cents to reach $1.48. The company is being revived and restructured by majority owner Ron Shon with the help of Cliff Grandison, a former executive with Placer Dome. The company has considerable debt (and tax-loss credits), but it also has a dormant gold mine and mill in the Iskut River region of British Columbia, as well as a large land package considered prospective for a variety of mineral deposit types.

GWR Resources was also active, gaining 34 cents to 79 cents. The junior is drilling a property east of Lac LaHache, B.C., considered prospective for a porphyry copper-gold target. Assays are awaited from a recent hole reported to have intersected 250 ft. of “copper mineralization.”

Vancouver analysts are keeping a close eye on several juniors involved in the WO property southeast of Dia Met’s property where a big “twin-pipe” geophysical target was correlated with a diamond indicator anomaly. Dentonia Resources picked up 14 cents to 67 cents because of this interest, while Kettle River Resources gained 22 cents to reach $1.30.

Aaron Oil, which is active in diamond exploration in both Saskatchewan and the Northwest Territories despite its name, remained even at the 75 cents level. The company trades on the Alberta Stock Exchange and continues to keep its hand in the oil exploration business.

Winslow Gold picked up 31 cents to 46 cents in active trading on the VSE. Larry Nagy recently joined the board of this junior which has several claim blocks in the Lac de Gras region.