Toronto Stock Exchange Aur, Louvem big gainers as discovery gains

As more information comes to light on this discovery, investors are recognizing the significance of the discovery. Still too early to call a mine, the discovery appears to have at least 6 million tons of material that could be ore if reserve grades match core grades. There have only been three holes cut in the massive sulphide zone over significant widths, but the latest came from between the other two and boost ed confidence about the continuity of the zone.

Aur closed at $7.88 today after reaching a high of $8.38 earlier in the week. Today it traded about 760,000 shares. That’s 7.8 million shares traded since the discovery was announced less than two weeks ago. The Friday before the discovery came to light Aur closed at $2.95.

Societe Miniere Louvem, the most active trader this week, has an interest in the property, although exactly what interest is a matter of dispute between it and Aur. Louvem has been the big gainer in percentage terms having gone from 52 cents before the discovery to close today at $2.71, up 19 cents . Today it traded 1.7 million shares for a total of 11.3 million shares since the discovery and has been as high as $3.10.

With 16.5 million shares outstanding, Aur’s total market capitalization now comes to $130 million. That’s compared to a market cap of less than $48 million before the discovery. Combine Aur’s current market cap with Louvem’s at about $35 million and one gets a good indication of just how important the market believes this discovery to be.

There are some other players riding on the coat tails of this discovery, too. Cartier Resources closed at 12 cents today, up 7 cents on the week, on almost a million shares. It holds a 5% net profit interest in a claim block adjacent to the eastern boundary of the discovery area. Cartier says it is trying to expand its interest.

Beaufield Resources gained a nickel to close at 30 cents on 95,700 shares. It granted an option to VSE- listed High Frontier Resources to earn a 51% interest in Beaufield’s eight separate claim groups in the area.

St. Genevieve reached its year high for the year of $1.55 before closing today at $1.30, up 40 cents on the week. It traded 185,500 shares today, about 2.2 million over the week. St. Genevieve owns 56% of Louvem.

Overall, the market was flat over the week closing today at 3730, virtually unchanged from a week earlier. The metals and minerals index was down closing at 3237 from 3378 last week while the gold and silver index closed at 5808, up about 100 points from last week’s 5701. Almost half of the gold index’s weekly gain came today as it picked up 47 points for an 8% gain.

The gold index benefitted from a weakening U.S. dollar which caused the price of gold to perk up a bit today. Although the London fix was down slightly today, the Bank of Nova Scotia reports that were as high as $372(US) an ounce. That’s up $6 from the London p.m. fix today of $365.90. The bank says the bid ask at the close of business was $369-$372.

Senior gold issues responded only marginally, however. Placer Dome, for example, was up 25 cents over the week to close at $16.13. As usual, it was a big trade with 1.2 million shares changing hands over the week.

Although it won’t have a huge impact on the company’s bottom line, spirits were high among Placer Dome’s Canadian mining group with the official opening of the Dona Lake mine in northwestern Ontario. Due to produce 40,000 oz of gold annually using bulk mining methods, the mine should prove to be a good little money maker for the company.

International Corona was even at $9 on 247,000 shares while LAC Minerals was up 13 cents to close today at $12.13 on 177,000 shares. Hemlo Gold was up 38 cents to close at $14.38 on 108,000. American Barrick was up 38 cents to $27 on 92,000 shares.

One issue that lost a lot of steam this week was Inco. It closed today at $32.25, down $2.38 on the week. More than two million shares changed hands. With record earnings continuing, debt being reduced, operations running smoothly and nickel inventories low, there doesn’t seem to be any good reason the nickel miner should be slipping. But investors get jittery when talk of a downturn grows strong and Inco is seen as vulnerable should the U.S. fall into a recession.

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