TSX Venture Exchange continues gains during week of Sept. 20-24

The S&P-TSX Venture composite index enjoyed another strong week between Sept. 20 and 24, closing at 1,699.55, an advance of 37.59 points or 2.3%. Over the period, 108 Venture-listed companies reached new 52-week share price highs while 85 fell to new lows.

Companies in the red-hot rare earths sector took the top two spots on the list of value gains with Rare Element Resources jumping $2.09 to close the trading week at $7.95 per share and Quest Rare Minerals adding 93¢ to $4.61 per share. Another rare earths junior, Tasman Metals, was up 62¢ to $1.82 on no news, claiming the fourth spot.

Rare Element Resources announced on Sept. 23 that it had made a presentation on its Bear Lodge rare-earths project to the Wyoming Legislature’s joint minerals, business and economic development interim committee, whose goals are to diversify Wyoming’s economy. In the company’s presentation to the committee, president and chief executive officer Donald Ranta noted that that there was an increasing likelihood for the company’s advanced exploration stage Bear Lodge project in Crook County to become the second primary rare-earths mine in the U.S. and said management planned to reach another milestone shortly with a forthcoming scoping study.

Montreal-based Quest Rare Minerals, meanwhile, put out the results of a positive preliminary economic assessment of its Strange Lake B Zone project, about 175 km northeast of Schefferville in Quebec. (Vale’s Voisey’s Bay nickel mine lies 125 km to the east of the project.) Wardrop’s financial analysis considered a total of 33.9 million tonnes of ore, to be mined for a mine life of 25 years. Using an exchange rate of $1.04 to the US$1, and an operating cost of $101.94 per tonne of ore, Wardrop estimated a pre-tax internal rate of return (IRR) of 36.36%. Overall, total capital and operating expenditures were pegged at $563.4 million and $3.53 billion, respectively. Additionally, total revenue before taxes from metal sales were calculated at $7.97 billion during the life of mine. The study also concluded that the project would have a positive payback in its fourth year, and would realize positive cash flow from its second year.

On the precious metals front, Bear Creek Mining was up 67¢ at $5.97 on no news, backed by strong silver prices that are up by about 30% since the start of the year. (At press-time the December contract for silver was $21.47 an oz., a 30-year high.) Bear Creek’s Corani and Santa Ana projects in Peru contain more than 500 million ounces of silver, plus by-product base metals, and provide near-term production potential and excellent leverage to silver prices, the company believes. A pre-feasibility study for its flagship Corani project estimated average annual production of 10 million ounces for the first six years of a 27-year mine life, with low cash costs, while a scoping study for Santa Ana examined a proposed, low-cost pure silver mine producing 5 million ounces annually in the first six years of an estimated 12-year mine life. Both projects are undergoing feasibility studies.