Venture Exchange eases back after gains

Stocks on the TSX Venture Exchange slumped in the last two trading days of the reporting period Feb. 18-24, leaving the S&P-TSX Venture composite index at 1,863.61 points, down 67.90 points or 3.5% of value.

Drill results announced by Far West Mining disappointed the market, with the stock plunging $1.83 to close at $1.07 on a volume of 4.4 million shares. At its Candelaria project in Chile, Far West had drilled five holes on a northwest-striking structure that hosted discontinuous copper-gold mineralization. The new drill holes intersected some wide zones of mineralization, the best being a 52-metre length grading 0.14% copper. The grades didn’t match earlier drill results on the same target.

Skeena Resources resumed trading after a 6-week halt and got a poor reception for a recent property deal, falling 16 to 24. Skeena announced it had come to a final deal on an option agreement permitting it to earn a 100% interest in the Magdalena mining concession in Ecuador from two private Ecuadoran companies. The fly in the ointment was an application by regulatory authorities in the Pichincha region to nullify the Ecuadoran companies’ title to the concession.

Ministry of Mines officials and regional staff had previously affirmed title to the concession, and the parties to the deal are seeking a resolution. Skeena said the Ecuadoran president’s office told the company a resolution to the problem could be expected within a month.

Some of the shine wore off QGX after last week’s announcement of the discovery of a second copper zone at its Golden Hills property in Mongolia. Several holes drilled on the property’s South zone in late 2002 and early 2003 were assayed for copper after copper-gold-silver mineralization was found in the North zone. These resampled holes returned copper grades ranging from 1.2% to 2.9% and QGX jumped 85 to $5.60 on the news. Profit-taking took over this week, and the stock fell back to $4.35.

On the plus side, Calgary-based Muskox Minerals was up 9 in heavy trading, closing at 27 on a volume of 4.2 million shares. Muskox announced that drilling on the Yellow Jacket property near Atlin, B.C., had intersected multiple zones of gold mineralization.

Among the best intersections was a 5.6-metre zone grading 513.5 grams gold per tonne (15 oz. per ton), an intersection mainly carried by a 0.15-metre interval with a gold grade of 5,724 grams per tonne, or just over 0.5%. Other narrower zones still carried excellent gold grades, including a 3-metre intersection running 34.8 grams per tonne.

Mexgold Resources, up 47 at $3.14, announced it had raised $45 million in a private placement, with the funds to be used to buy the El Cubo gold and silver mine in Guanajuato state, Mexico. El Cubo produces 1,400 tonnes of silver-gold ore per day for annual production of 58,000 oz. gold-equivalent.

Polymet Mining, which ironed out an asset swap agreement with iron producer Cleveland Cliffs, packed on 17 to finish at 54. The iron miner gets US$500,000 and a million shares of Polymet in exchange for plant, equipment and surface rights near Babbitt, Minn. Polymet’s nearby Northmet copper-nickel project is currently undergoing a feasibility study, and Cleveland Cliffs has indicated its interest in tendering for contracts to operate the Northmet plant and contract-mine the deposit.