Diamond sector buoys juniors

Junior mining stocks edged higher over the trading period Feb. 2-Feb. 8 despite weaker metals prices. The TSX Venture Exchange eked out a 7.5-point gain, or less than 1%, to finish the period at 1812.67. The diamond sector saved the day, thanks to market activity and gains.

Weakness in precious metals saw spot gold fall to US$413.40 per oz., as the U.S. greenback gained strength against the euro and yen. Gold finished down US$7.10, or 1.6% — the lowest it has been in about four months on the New York spot market.

The dollar’s climb was attributed to the increasingly bullish investment climate in the U.S., which propelled it to its highest level in almost two months. As the dollar rose, the price of gold dipped; it has fallen 5.5% this year, while the euro has declined 5.7% against the dollar.

Gold was further depressed by concerns the International Monetary Fund is considering selling some of its precious metal reserves to reduce the debt of poor countries. Any selling in gold by the central bank is usually interpreted as bearish.

The trading period saw 40 new 52-week highs for Venture Exchange-listed companies, whereas about double that number reached new 52-week lows.

Topping the most-active list was Dianor Resources, which is generating excitement because of diamonds found on its Leadbetter property, 12 km north of Wawa, Ont. Caustic fusion performed on a 27-kg bedrock sample recovered 102 diamonds weighing a total of 0.019 carat. The company traded more than 9.6 million shares and reached a 52-week high of 71 before finishing the week 31 higher at 69. Dianor gained 81.5% over the period, higher than any other stock.

Second on the most-active list was Calgary-based Trio Gold, which traded more than 5.3 million shares. The shares in the company closed up half a cent to finish at 19. Trio released the results of three of nine reverse-circulation holes drilled at the Empire Mine project, near Mackay, Idaho. The most recent holes were drilled 600 ft. south of hole 1, which bottomed in 13.5% copper. The results contained significant intervals of copper, gold, silver and zinc.

Forest Gate Resources was the third most-active stock. With more than 4.7 million shares changing hands, the issue gained 8 to close at 28. The company hit a new 52-week high of 30.5 over the session. Forest Gate recently staked 420 sq. km south of Prince Albert and Fort la Corne, Saskatchewan, in search of diamonds in kimberlite. The area is believed to encompass the same northwest-trending axis as the Fort la Corne field owned by the Kensington Resources-De Beers joint venture. Kensington Resources finished up 28 to close at $1.44 on a volume in excess of 3.9 million shares.

Uranium explorer JNR Resources traded in the range of 3.2 million shares and closed up 11, to $1.33.

Losers included Victoria Resources, which slipped 34% on more than a million shares to close at 60. Results from drilling on the Mill Canyon project in north-central Nevada indicate a Carlin-style alteration system, yet the gold values pale in comparison with the previous high-grade interval in the RJR zone.