Venture returns to negative territory in April 30 – May 4 period

VANCOUVER — The S&P TSX Venture Composite Index slipped back to negative territory in the April 30 – May 4 period, ending down 7.71 points at 1,405.05 after three days of losses outweighed two days of gains. Volume for the period was down to an average of 77.3 million shares daily after spiking to an average of 102 million the week before due to Iamgold’s proposed takeover of Trelawney Mining and Exploration.

With the deal still fresh, Trelawney was again the most active company with 23.1 million shares traded. There looks to be little speculation of a rival bid, with Trelawney’s share price holding steady at just under the $3.30 bid price, closing up a penny at $3.29. Further committing Trelawney to the deal are a non-solicitation clause, right to match covenants and a $21-million break fee. Analysts have reacted somewhat negatively to the deal, citing the low-grade and early-stage nature of the deposit as well as potential cost overruns and permitting risks.

Amex and Venture-listed Gold Reserve climbed 41¢ to end at $4.55 for the second-highest value gains of the period after entering into an option agreement with Soltoro. Gold Reserve has signed on to earn 51% of the 115.6-sq.-km La Tortuga property in Mexico’s Jalisco state by paying US$650,000 cash and US$3-million in exploration spending. Venezuela expropriated Gold Reserve’s main Brisas property in 2009, leading to the company being downgraded from the TSX to the Venture last year and in need of a new primary project. Soltoro ended down 6¢ at 52¢.

Bolero Resources was also up after announcing an option agreement, climbing 7¢ or 70% to 17¢ with 4.8 million shares traded after securing a graphite property in northern Ontario. The 50-sq.-km graphite prospect happens to fully surround Northern Graphite’s 30-sq.-km Bissett Creek claim block. Bolero can earn in 100% of the property by paying $100,000 and issue a million shares to GeoInvest Enterprises. Bolero did not specify what makes the property prospective to graphite in its announcement other than its proximity to the Bissett property.  

Penny-stock New Guinea Gold saw 7.9 million shares traded to become the second-most active stock on the Venture after announcing a management cease-trade order and updating its potential acquisition by PNG Gold. Believing the takeover would have been complete by now, management has not prepared the necessary financials for the exchange. PNG Gold had offered to issue 0.125 of a PNG share for each New Guinea share held. New Guinea closed unchanged at 2¢ while PNG closed down a penny at 18¢.

High-profile Yukon stocks showed some signs of life, with Kaminak Gold climbing 23¢ to $1.99 and Atac Resources up 21¢ to $2.87. Kaminak recently released initial 2012 drill results that showed more well-oxidized gold zones near its three most established zones, including 32 metres grading 3.6 grams gold per tonne and 37 metres averaging 2.1 grams gold. Atac is not expected to start drilling its property until June.