Vancouver Stock Exchange Confidence restored after mini crash

Trading activity was still volatile on Monday, but nothing like the roller-coaster ride the previous Friday when the VSE Index plunge of 44.78 points to 704.66 was its largest single day collapse since the October, 1987, crash. But the Index closed up Monday and has been on a moderate upward trend since.

At presstime, trading was buoyant and the mood optimistic. Everything was up. The big boards back east, gold, oil prices, and the VSE Index managed to gain 14.54 points to 715.67 only half way through today’s session.

Prime Resources climbed 24 cents to $2.20 today after losing ground last week. The company completed its offering some weeks ago, raising $22.5 million for working capital and to acquire new assets or properties. The offering sold at a unit price of $4.50 which includes one share and one A warrant.

Calpine Resources, which has 50% of the Eskay Creek gold/base metals project in northwestern British Columbia, regained $1.05 to reach $5.75 at presstime. Calpine’s 50/50 partner, Stikine Resources, got a boost of $7.87 to reach $41.60. The issue dipped to $33.75 last week.

The news is on the wire that Stikine may be close to a deal with a major mining company for the sale of its shares. Corona Corp. is said to the most likely of several contenders, seeing that it already has a substantial stake in Prime (about 30% fully diluted) which in turn has a substantial stake (33.6%) in Calpine.

Prime is also seeking to acquire all Calpine’s shares, but a group of Calpine investors don’t like the deal and have rallied in opposition to the proposal. Brokers say Prime might have a hard time getting the deal through. But if Corona is in fact the buyer of Stikine shares, brokers expect Eskay Creek will be a Corona-managed operation in no time flat.

Adrian Resources lost 15 cents to $1.33 over our report period. However, it was up 37 cents to $1.70 at presstime. Adrian has a property to the north of Eskay Creek, but it won’t be drilled until complicated staking disputes are resolved.

Mining analysts are taking the Continental Gold/BP Resources legal dispute over the Mt. Milligan gold-copper property near Fort St. James, B.C., seriously. So are investors. Continental Gold issue slipped 25 cents to $7.87 after losing ground last week.

Crown Butte Resources lost $2.75 over our report period, but moved up 50 cents to reach $7 at presstime. The company recently re-priced its previously announced private placement to $8.50 per unit from $10.75. Noranda owns 24.9% of the company, and Plexus Inc. owns 19.7%. Crown Butte is exploring a gold project in Montana.

Kap Resources gained $1.05 to $4.45 based on news it would be doing a financing of $750,000 with Zurfund International to give it a 27% interest in the company. Zurfund is involved in a number of ventures, including an iodine/ nitrate project in northern Chile.

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