Venture stumbles during Mar.7-11 trading period

Vancouver – The S&P-TSX Venture composite index tumbled 173.08 points in the Mar. 7-11 trading week to close at 2,266.75. Trading volumes remained strong, however, averaging 193 million shares daily, with 110 companies hitting 52-week highs and 53 reaching new lows.

The most active trader on the Venture exchange was Encanto Potash, which dropped 9¢ over the week to close at 38¢. The company had previously been enjoying a spectacular run-up in junior potash stocks that started in mid-2010 as fertilizer and crop prices increased (and speculation surrounding BHP Billiton’s failed takeover of Potash Corp. of Saskatchewan reached fever pitch). Investors await Encanto’s initial resource calculation for its main potash project, Muskowekwan, in Saskatchewan, 100 kilometres north of Regina. Drilling there in 2010 returned grades greater than 25% K2O or 40% KCl over several metres in two separate potash beds. This week, Encanto announced it is modifying the initial resource report to include calculations based on conventional mining methods and the in situ leach (ISL) mining method, as it argued different methods can have a profound impact on resource tonnage. It expects to finalize the report in early April.

Diamond International Exploration has changed its name and its exploration focus, helping it become the trading period’s biggest percentage gainer. The company, now called Northaven Resources, has decided to shift its focus away from the several diamond prospects it controls in Brazil to more promotable metals, such as gold. In that vein, it has acquired an option on a new British Columbia gold prospect it calls Murray, near Upper Arrow Lake in the southeastern part of the province. The news propelled the stock up 8¢ to 15¢. Northaven says it is also reviewing a number of gold, silver and copper properties in Canada and South America, and is in advanced negotiations for a few other B.C. prospects.

The trading week’s biggest percentage loser was Sidon International Resources, which lists its headquarters as a P.O. box in Everett, Wash. Initial drilling at the company’s main MEG project in Tanzania, including three metres grading 1.7 grams gold per tonne, failed to impress investors and helped push the stock down to 6¢ from 12¢, or 50%. 

Finally, Giyani Gold was the week’s biggest value gainer, rising 47¢ to $3.48. Giyani, formerly a shell named 99 Capital, recently raised $9 million in a private placement to pay for its acquisition of a 66.5% interest in six past-producing gold mines in the Giyani greenstone belt of South Africa. The company says the belt is a historically underexplored region of the country, and a key industry development initiative for the Chamber of Mines of South Africa. Giyana Gold has extended the deal’s closing date several times from the original date of Oct. 29, 2010, while it completes due diligence and finalizes certain terms. It now hopes to complete the transaction by March 31.