STOCK MARKETS — De Beers-Yamba Lake deal stirs up western

Although strength in bond and currency markets managed to help major eastern indexes, western markets continued to track down over the report period ended July 19.

The Vancouver Stock Exchange resource index lost more than 19 points to finish at 1,536.02, with the composite index following suit for a 5.03-point loss to 925.82.

The involvement of De Beers in the Yamba Lake diamond prospect in the Northwest Territories sent joint-venture partners Mill City Gold Mining and Tanqueray Resources on a wild ride.

Mill City plunged to a low of $1.56 on the news before rebounding to close down 18 cents at $1.85. Tanqueray followed, dipping to $3.25 before recovering to $3.75 for a loss of 45 cents.

Rumors of a pending agreement with De Beers have been circulating for some time and investors may have been hoping for a sweeter deal.

The agreement in principle gives De Beers the right to earn a 51% interest in Yamba Lake by arranging financing of up to $500 million for the construction of the first mine. De Beers will also purchase $2 million in treasury stock from each of Mill City and Tanqueray at $2.20 and $4.40 per share, respectively.

St. Philips Resources slipped 40 cents to close at $2, mirroring a big drop in Vengold.

Vengold is completing a due diligence on the acquisition of all St. Philips’ outstanding shares. The deal will exchange 2.5 St. Philips shares for one share and half a warrant of Vengold.

Vengold recently released exploration results from its Oro Uno property in Venezuela, stating it is “encouraged” by the first-phase work. Investors were apparently not so enthused, hammering the issue down $2.75 to $5.50. Latin American Gold could not come up with a reason for the 95 cents drop in its share price to $2.35. The company is continuing to pursue opportunities in the mining sector and remains confident of its ability to secure properties of merit in South America.

The start of a drilling program on the Willoughby property near Stewart, B.C., gave a boost to Camnor Resources. The issue traded as high as $1.44 before finishing up 17 cents at $1.28.

Previous drilling on the property’s North zone returned values of up to 0.73 oz. gold and 5 oz. silver per ton over 67.2 ft. Camnor is earning a half interest from Gold Giant Minerals, which closed up 27 cents at 87 cents. Southwestern Gold added $1.88 to finish at $13.25 as drilling gets under way at its 30%-owned Santa Rosa joint venture with Cambior in south-central Peru. Channel sampling from a 1,300-ft.-long-by-500-ft.-wide, Carlin-type, epithermal zone avergaed 0.12 oz. gold and 1.42 oz. silver.

Additional high-grade muck and face samples from the Iron joint venture at Rossland, B.C., gave a lift to partners Pacific Vangold and International Silver Ridge Resources. The former traded as high as $1.65 before settling at $1.35 for a gain of 20 cents while the latter closed up 20 cents at 95 cents after trading as high as $1.12.

Results from the first two drill holes on the Red Chris porphyry copper-gold project in northwestern British Columbia helped American Bullion Minerals add 15 cents to close at $2.10. The first hole intersected 615 ft. grading 0.66% copper and 0.012 oz. gold while the second hit 955 ft. grading 0.62% copper and 0.013 oz. gold. Both holes have higher-grade zones, including 202 ft. grading 1.22% copper and 0.021 oz. gold.

Bonaventure Resources managed a bit of a rebound after it announced a voluntary undertaking from various of its principal shareholders to neither buy nor sell shares without approval by the president.

After touching a new low of $1, the issue closed up 62 cents at $1.72 — still a far cry from its high of $5.63.

The voluntary measure is intended to give the Vancouver Stock Exchange time to review the company’s corporate affairs relating to investor relations and distributions from control.