Venture slides to seven-month low

The S&P/TSX Venture Composite Index continued to slide during the June 6-10 trading period, falling 79.6 points to 1,934. The index has already retreated approximately 21.5% from its early March peak of 2,464 points, slightly more than the 20.5% total fall experienced during last year’s market downturn from May through July, when the index dropped from roughly 1,700 points to 1,350. Average daily trading volume remained low at 92 million shares.

IBC Advanced Alloys saw the most trading activity over the trading period at 11.57 million shares after it entered into an exclusive supply contract to provide investment-cast engineered components to a leading technology manufacturer. It will supply the manufacturer with its Beralcast family of beryllium-aluminum alloys, which Vancouver-based IBC says are more than three times stiffer than aluminum, 22% lighter and can easily be precision-cast. Financial terms of the deal were undisclosed.

Rio Alto Mining also saw plenty of volume but fell 13¢ over the trading week to close at $2.25. In May, Rio Alto shares rose after the company poured the first gold from its La Arena gold mine in Peru, however the stock has since retreated from its 52-week high of $2.78 as political concerns in Peru heat up. On June 5, left-wing nationalist Ollanta Humala won Peru’s presidential run-off election, prompting a sell-off in many Peru-focused mining stocks as investors fear the new government will institute a windfall mining tax.

Western Potash saw the biggest value gain over the week, climbing 19¢ to close at $1.54. Recent exploration results from the company’s Milestone potash project in Saskatchewan have boosted estimated resources by roughly 40%. Measured resources now stand at 637 million tonnes of in-place sylvinite grading 30.4% potassium chloride (KCl), for 64 million tonnes KCl. Indicated resources are 1.8 billion tonnes sylvinite at similar grades for 180 million tonnes KCl, while inferred resources total 8.9 billion tonnes sylvinite for another 701 million tonnes KCl. A prefeasibility study for Milestone is due in the fourth quarter.

Also bucking the downtrend was Allana Resources, a potash explorer focused on its Dallol project in Ethiopia. Shares of Allana climbed 13¢ over the week to $1.94 after the company released drill results showing strong potash mineralization in a central part of the Dallol evaporite basin, including 4.1 metres of 37.8% KCl in sylvinite starting from a depth of 349 metres. Shareholders are also eagerly awaiting an update to the current resource estimate, expected later this month.

Lastly, Sudbury-based Ginguro Exploration rose 43% to close the week at 23¢ and top the list of percentage gainers. In May, the company received drill permits for its El Alto iron-oxide-copper-gold (IOCG) project in Chile and began road construction to the site. It now plans to start diamond drilling in mid-June with a $1.5-million, nine-hole program totalling 3,500 metres. The program will test two anomalies found in geophysical surveys completed last year.