Toronto Stock Exchange Windarra find a point of interest in quiet

In a week when investors showed a distinct lack of interest in buying resource stocks it was comforting to note that a Saskatchewan gold discovery could succeed in garnering some attention. News that partners Windarra Minerals, Cameco and Uranerz Exploration had encountered high- grade gold values south of the Bakos zone on the Preview Lake property drove Windarra shares as high as 99 cents from 73 cents.

An affiliate of Hemlo Gold Mines, Windarra is hoping the new values, including 15 ft. of grade 11.8 oz. gold per ton will add some weight to a property that is already the subject of a feasibility study.

However, the 510,100 Windarra shares that changed hands during the week ended April 10 failed to make much impact on a market that is already suffering from low precious metal prices and high interest rates.

Today, April 11, as gold continued to lose its lustre, closing down US$1 at US$374.50 on the second London fix, sell orders also outnumbered buys on the Toronto exchange. As a result the composite 300 index dropped 29.12 points before closing at 3565.77. The gold and silver index gave up 153.70 points to end the day at 6629.35.

The recent gold sell-off has been related in part to the modest firming of the U.S. dollar against the Deutsche mark, in addition to U.S. dollar strength against all other currencies in recent months, according to the Bank Credit Analyst, the Montreal-based monthly that attempts to forecast economic trends.

“Gold has also been affected negatively by the global rise in interest rates and the prospect of a more prolonged credit squeeze than many had expected,” the publication says. However, the Bank Credit Analyst, like many other gold watchers, believes that gold will eventually move upward in the long term.

Meanwhile, gold’s slide had a predictable effect on the share values of some of North America’s big producers. American Barrick Resources was the biggest casualty. It gave up 63 cents. Following close behind were Corona A shares, dropping 50 cents, and Hemlo Gold down 38 cents. Placer Dome dropped 38 cents while Echo Bay ended the day down 17 cents.

Faring better were the Golden Queen and Madeleine Mines issues which both reached new highs this week. Based in Vancouver, Golden Queen is newly listed while Madeleine appears to be responding to rumors relating to a possible startup at its platinum group metals project near Thunder Bay, Ont.

Breakwater Resources was among the volume leaders this week as it waited to take full control of the previously troubled Caribou lead zinc mine in New Brunswick. Hired by mine owner Bathurst Base Metals to manage a development program, Breakwater has brought the mine back into production and a deal has been struck between the two companies. Breakwater closed up 11 cents at $2.43.

RFC Finance House was also active this week as it moves toward production at the Pend Oreille zinc project south of Trail, B.C. An affiliate of Kerr Addison Mines, RFC added 43 cents to its share price before closing at $2.98.

Still in British Columbia, Stikine Resources shot up by $4 to close at $55 earlier this week. It later slipped back to $54. The issue was responding to the release of final geological reserve estimates at the Eskay Creek gold property in British Columbia.

The Eskay Creek region should be an area to keep an eye on this summer when drill rigs hired by the major players are running at full speed.

Meanwhile, Windarra officials are euphoric over the Preview Lake drill results. But a spokesman said they would have no affect on the company’s decision on whether to press its right of first refusal on the Magnacon gold mine in northern Ontario.

Basically, Windarra can’t afford to increase its stake in Magnacon above 25% which leaves the door open for Echo Bay to acquire 37.5% of the operation as per agreements with Muscocho Explorations, Flanagan McAdam Resources and McNellen Resources.

Shareholders of the three companies are set to vote on the deal at meetings on April 17 and 18. McAdam, McNellen and Canada Tungsten Mining were among the issues reaching new lows this week.