Venture sees gains during May 24-27 period

The S&P/TSX Venture Composite Index rose 69.23 points to 2,100.67 over the May 24-27 period, as slightly higher metals prices buoyed many junior mining companies. Many Venture companies enjoyed a small rally over the short trading week after the strong sell-off in commodities earlier in May, however 133 companies still hit new 52-week lows compared with just 55 new highs. Trading volume over the period remained low, averaging 112 million shares traded daily.

Orbite Exploration saw the most activity on the exchange after producing the first samples of aluminum from its Cap-Chat pilot plant in Quebec. Shares of the company rose 21% or 74¢ to close at $4.13 by the end of the week. Orbite says it has conclusively demonstrated the viability of its patented technology for producing alumina, the fine white powder used to make aluminum, by extracting it from clay. The company owns rights to 3,500 hectares of land prospective for the alumina-rich clay in Quebec’s Grande-Vallee region, and hopes to eventually supply 20% of the world’s high-grade alumina.

Canaco Resources had the second largest value gains after releasing more stunning drill results from its Handeni gold project in Tanzania. The company drilled 17 metres of 23.96 grams gold per tonne from a new mineralized gold lode west of the main Magambazi zone. In an effort to unlock the value of another big project, Canaco is also spinning out its 70% interest in the Harvest copper-gold-silver VMS project in Ethiopia into a new explorer called Tigray Resources. Significant drill results from Harvest include 52.1 metres grading 4.1% copper, 1.55 grams gold and 25.9 grams silver, starting from a depth of just 45 metres. It expects to complete the transaction later this summer.

Despite an absence of fresh news, Rio Alto Mining was the third-biggest value gainer over the period, rising 39¢ to $2.63. The company successfully poured the first gold from its La Arena gold oxide mine in north-central Peru on May 6 and expects to reach commercial production during the third quarter. It is targeting gold production of approximately 75,000 oz. in 2011. Rio Alto optioned the advanced-stage project in June 2009 from Iamgold, which remains a significant shareholder of the company.

Struggling coal producer Cobalt Coal led the TSX-V in terms of percentage gainers, increasing 100% over the week to close at 6¢. Shareholders reacted happily to news that the company’s continuous mining machine at its Westchester coal mine in West Virginia had been fixed following a malfunction. Several recent production shutdowns at the mine have caused something of a cash crisis for Cobalt, which is having trouble raising money to meet short-term infrastructure upgrades, interest payments on debt and corporate administrative costs. It is now seeking approval to roll back its shares 1:10 next month, which the company hopes will help its cause.