STOCK MARKETS — Diamond selloff tremors continue to be felt

Losses on western markets continue to snowball in the wake of the recent selloff in diamond issues. Gold’s sleepy performance at the US$377-per-oz. level lent little support to the market, although, thankfully, it did nothing to contribute to the market slide.

The Vancouver Stock Exchange resource index shed 73.45 points during the report period ended Aug. 16, to close at 877.76. The composite index weathered the storm somewhat better, slipping a modest 25.04 points to the 877 level.

Current trading levels represent a greater than 25% drop in both indexes from their highs earlier this year.

After an initial bounce from their recent high-dive, three companies — Dentonia Resources, Kettle River Resources and Alberta-listed Horseshoe Gold Mining — fell to new lows.

The trio jointly holds a 35% interest in the WO claims in the Northwest Territories. Kennecott announced disappointing results from kimberlite bulk sampling on the property, sparking the initial selloff earlier this month. Dentonia lost 40 cents to close at 80 cents, Kettle River slid 44 cents to $1.70 and Horseshoe closed down 31 cents at 71 cents.

Other partners in the property include TSE-listed Aber Resources and SouthernEra Resources with 15% and 10% interests, respectively. Diamond explorers Mill City Gold and ASE-listed Tanqueray Resources also lost ground as nervous investors pared back holdings.

The two companies recently signed an agreement with De Beers Consolidated Mines, giving the major the right to earn a 51% interest in the Yamba Lake diamond project in the Northwest Territories. Mill City lost 34 cents to close at 96 cents, while Tanqueray slipped 50 cents to $1.50. Shareholders of Athena Gold are no doubt smiling at the company’s recent agreement with TSE-listed Miramar Mining. Miramar plans to acquire all the shares of Athena at a price of one Miramar share for every 2.8 shares of Athena. Miramar’s current trading level of $5.25 makes the deal worth about $1.88 per Athena share. Athena hit a high of $1.75 on the news before closing up 65 cents at $1.65.

International Curator took top trading spot with more than 4.7 million shares changing hands, nudging the issue up 2 cents to $1.67. Most of the volume represents a 4.5-million share block which had been owned by Coeur d’Alene Mines. Under an agreement between the two companies, Coeur will retain $4 million of the proceeds of the share sale, with the balance payable to Curator in return for its interest in the Jualin gold property in Alaska. Coeur also relinquishes all of its rights in the Boleo copper-cobalt property in Mexico, giving full control of the property back to Curator. Trading in Guyana Gold was reinstated after the completion of a reverse takeover. The issue traded between $1.50 and $2.11 before closing at $1.85. Guyana Gold can acquire an indirect interest in certain mineral concessions in Guyana and recently completed a private placement of 3 million units at $1 each.

Gossan Resources did well during our report period, leaping $1.25 to $3.25. The company has drilled 48 holes on the Pipestone Lake property in northern Manitoba, a joint venture with a private company owned by the Cross Lake First Nations Band.

The drilling is testing four mineralized zones grading up to 11.5% titanium dioxide, 50.1% iron oxide and 0.58% vanadium pentoxide which Gossan notes would be worth in the order of US$450 per ton.

Minefinders Resources also bucked the downtrend, jumping $1.05 to close at $4.45. The company reports that geological mapping, prospecting and sampling on its Dolores gold-silver property in Mexico is yielding “impressive results.” The company has taken 330 surface samples from three mineralized areas, returning assays ranging up to 0.34 oz. gold and 18.6 oz. silver. An agreement to sell a 90.5% interest in the Kasperske Hory gold property in the Czech Republic to Toronto-listed TVX Gold did not help partners Royalstar Resources and Paramount Ventures & Finance. Royalstar lost 32 cents to close at $1.25 while Paramount slipped 17 cents to 75 cents.