Venture sees straight gains in May 22-25 period

VANCOUVER — During the May 22-25 period the S&P TSX Venture Composite Index managed to claw back much of the steep losses it had suffered the week prior, gaining 81.39 points to end the period at 1,309.27 points after four days of straight gains. The gains came despite fairly low volumes, averaging 70 million shares traded daily.

Providing a much-needed reminder of the potential of juniors, Goldquest Mining climbed from 6¢ to 40¢ for a 567% gain with 25.5 million shares traded after announcing a new gold discovery at its Las Tres Palmas project in the Dominican Republic. Discovery hole LTP 90 was testing a new geophysical target and returned 231 vertical metres grading 2.4 grams gold per tonne starting at 33 metres downhole. The first 70 metres of mineralization returned 1.3 grams gold and 0.04% copper, while the remaining 160 metres averaged 2.9 grams gold and 0.62% copper. The hole was stopped in mineralization for technical reasons.

While far behind Goldquest, Hana Mining still managed a strong percentage gain after its shares were hammered the week before. The company gained 32¢ or 78% to end at 73¢ with 6.9 million shares traded after seeing some recovery from the harsh initial reaction to the scoping study on its Ghanzi copper-silver project in Botswana. Hana is still quite a bit off the $1.29 it was trading at before releasing the scoping study. But the company did fare much better than Canaco Resources, which fell from 87¢ to 30¢ on the same day Hana dropped, and which ended the latest period with no recovery at 31¢ with 8 million shares traded.

Emerging silver producer Aurcana managed an 11¢-gain to close at 93¢ on 5.5 million shares traded after releasing positive quarterly results. The company reported a 20% increase in quarterly silver production to 287,500 oz. silver equivalent, which translated to a 186% increase in quarterly net income to US$2 million and quarterly revenue increase of 6% to US$11.6 million. Production came from the company’s La Negra silver-copper-lead-zinc mine in Mexico’s Querataro State, while Aurcana is also approaching production at its Shafter silver project in Texas.

Commerce Resources went from 20¢ to 30¢ in the period after releasing a preliminary economic assessment on its Ashram rare earth project in northern Quebec. The study outlined a 4,000-tonne-per-day open pit operation producing about 16,850 tonnes of rare earth oxides per year. The economics, based on a rare earth element basket price of $28.82 per kg., worked out to a pre-tax net present value of $2.3 billion using a 10% discount rate, and a pre-tax internal rate of return of 44%.  Capital costs came in at $763 million, including $204 million for a 185-km road to a port in northern Quebec.

Chesapeake Gold continued its recovery with a $1.02 climb to end at $10.04, despite announcing a delay to the prefeasibility study on its Metates gold-silver project. The company had previously committed to having the study out by the end of the first quarter in 2012, and then delayed it until the second quarter, and just in the last period announced the study would be delayed until the third quarter. Chesapeake dropped from about $12 in late April to a low of $7.99 in mid-May.