Vancouver Stock Exchange Trading buoyed by Eskay play

Up until the week ended June 12, gold’s dismal performance wasn’t putting much of a damper on trading activity on the Vancouver Stock Exchange. In fact, recent increases in both volume and value of shares traded contributed to a break-even year for the VSE in 1989/90. Exploration activity in northwestern British Columbia is credited with having boosted trading volumes and values on the Exchange in recent weeks, particularly now that a bidding war has emerged for one of the region’s most significant discoveries, Eskay Creek.

News that a road will be built into this remote but mineral-rich region has also spurred interest in companies working in the area, as access will have a dramatic impact on the economics of future mining operations.

But like most Canadian exchanges, the prolonged weakness in gold prices is starting to have a negative impact on trading activity. At noon today, June 13, the VSE Index was down 5.40 points at 774.35, a drop of 23 points from a week ago.

As expected, Placer Dome announced it will continue to bid for Stikine Resources which owns 50% of the Eskay Creek project north of Stewart, B.C. The company believes its offer of $67.50 cash, or alternatively 3.5 of its shares, is “superior to the Corona proposal.”

Corona recently announced a sweetened deal with partners Stikine and Prime Resources which it believes has locked up control of the project. In any event, analysts expect Placer Dome will have a battle to get the best of Ned Goodman, a man who could easily write his own book on “the art of the deal.”

The battle for control of Eskay Creek appears to be triggering interest in other projects in the region, and confirming the important role played by the Vancouver Stock Exchange in financing new discoveries.

The volume leader was a junior company on the trail of “Sullivan mine-type” deposits near Cranbrook, B.C.

Barkhor Resources traded a whopping 6.8 million shares although the issue gave up 4 cents to settle at $1.48. The very large volume of shares traded in recent weeks has raised eyebrows, given that the company has 7.2 million shares outstanding, and given the early stage of the properties.

Sirius Resources gained a dime to 20 cents in good volume. The company is involved with Verdstone Resources (a Rea Gold-associated company) on a property in the Northwest Territories where exploration is focused on the property’s potential to host both placer and lode deposits. We gather the company’s rise in share price is related to a recent 2-million share private investment.

Adrian Resources got a boost of 40 cents to $4.50 in brisk trading. The Prime group company has prospective ground adjacent to the Eskay Creek property which includes (by way of a staking gap) a portion of the reserves contained within the Eskay Creek deposit.