STOCK MARKETS — Gold price surge adds fuel to Western

A surge in the price of gold, to the US$390-per-oz. level helped propel the Vancouver Stock Exchange resource index to a high of 1,449.07 before settling for a 93.88 gain at the 1,430 level.

The composite index followed suit with a 42-point jump to 1,050.92 by the end of the week ended July 6.

Although the market is experiencing nothing like the speculative furor that characterized the 1986-1987 run-up, junior gold explorers are beginning to get some attention.

Lou Wolfin’s Avino Mines & Resources jumped 21 cents to close at 76 cents. The company hopes to bring its wholly owned Bralorne mine property back into production. The old mining complex, about 100 miles north of Vancouver, B.C., produced more than 2.5 million oz. gold from 1932 to 1971.

Coral Gold, another Wolfin company, added 21 cents to finish at $1.36. Amax Gold is earning a 60% interest in the company’s Robertson property, in the Crescent Valley area of Nevada, and has encountered wide, deep gold intersections.

Buying interest in Arizona Star Resource increased, with the issue gaining 25 cents to close at $1.65. The company’s 35% interest (together with partner Glamis Gold) in a claim block in Imperial Cty., Calif., is beginning to look interesting as a result of the recent increase in the price of gold. Glamis’ last estimate put the project’s geological resource at more than 56 million tons grading 0.024 oz. gold per ton. Glamis stated that pre-feasibility work indicates a substantial economic reserve exists at a US$400-450-per-oz. gold price.

Arizona Star is also earning a 51% interest in the Aldebaran heap-leach gold project in Chile. The company expects to complete a pre-feasibility study by September, including an upgrading of preliminary reserves which are currently estimated at about 75 million tons grading 0.025 oz. gold.

Prime Equities International closed at a new high of $6.63, up $1.13 on the week.

Prime Resources Group also continued to gain ground, finishing up 83 cents at $5.13. The company is selling all its holdings in Homestake Mining common stock for $9.4 million. It also announced that it has received $9.1 million from the redemption of Homestake preferred stock and proceeds of $700,000 for the first instalment from the sale of its interest in Prime Equities. Investors continued to bid up Hycroft Resources & Development, spurred by higher gold prices and a general shortage of junior producers. The issue touched a high of $4.50 before settling for a gain of 40 cents at $4.35. Rebounding from an initial bout of profit-taking, Miramar Mining jumped $1.10 to close at $3.75. When it buys the Con mine near Yellowknife, N.W.T., Miramar will, overnight, become a 120,000-oz.-per-year producer. Although operating costs at the Con mine are believed to be relatively high (no cost figures have been released), the rising price of gold puts leverage on the company’s side.

On July 20, Skyline Gold expects to complete its reorganization into two separate entities.

One share of Skyline will be exchangeable into one share of International Skyline (which will have no debt and hold all the old company’s assets) and one share of Skycreek Minerals (which will owe about $6 million and retain about $44 million in tax pools). Skyline closed up 15 cents at $1.45. An extension on the financing deadline for its Keystone joint venture in Manitoba helped Cazador Explorations with a 23 cents boost to $1.20. The company can earn a 49% interest in the gold project by funding it to production. Cazador has arranged all but about $3 million of the required $7.9 million capital cost.

Jacqueline Gold fared better after being pummelled by negative comments from local mining analysts last week regarding its San Lazarus joint venture in New Mexico.

Jacqueline finished up 66 cents at $2.46 on more than 1.6 million shares. Toronto-listed BMR Gold, which owns 30% of the project, added 13 cents to close at 92 cents.