VANCOUVER – February did not start off well for the S&P TSX Venture Composite Index: the board lost ground every day from Feb. 4th to 8th to end the week down 22.85 points at 1,205.81. Trading volumes for the week averaged 76.6 million, boosted by a well-above-average 94 million trades on Feb. 4.
Galaxy Graphite was responsible for a fair chunk of that volume. In two days 23 million shares of the junior company traded hands, representing almost every share in its 24-million share float. The trading frenzy came after Galaxy announced the discovery of high grade, large flake graphite at its Buckingham project in Quebec. A sampling effort at the project, which is home to two historic graphite mines, produced one sample grading 11.5% graphitic carbon. Galaxy’s share price jumped 330% on the news to reach 13¢.
The second company on the Venture volume leaders list for the week was also a graphite company. Zenyatta Ventures announced that beneficiation tests on samples from its 100%-owned Albany graphite deposit in Ontario yielded ultra-high purity graphite. The carbon content in natural graphite ranges from 70% to 99% and the purer the graphite the higher the price it will command. Zenyatta’s graphite tested at 99% C or better. The news added 29% to the company’s share price to close the week at $1.37 on 13 million shares traded.
The third big junior story of the week came from Encanto Potash, which completed a prefeasibility study on its Muskowekwan property in Saskatchewan. The study found that a solution mining operation at Muskowekwan producing 2.8 million tonnes of potassium chloride annually could operate for more than 50 years based on current reserves. It would cost $2.9 billion to build the mine, including a gas pipeline and a co-generation plant, and the operation would generate a 19.1% after-tax internal rate of return, using a 10% discount rate. Encanto gained just a penny on the news, despite moving more than 10 million shares.
The first two holes of the winter exploration program at the Patterson Lake South uranium property produced 21- and 37-metre intervals of continuous mineralization respectively, and each interval included sections that generated off-scale radioactivity readings. Property owners Fission Energy and Alpha Minerals both jumped on the news, with Alpha gaining 80¢ over the week to reach $2.90 while Fission added 10¢ to reach 85¢. Patterson Lake South is in the Athabasca Basin.
Mirasol Resources saw its share price move the other way: MRZ shares lost 20¢ in a day to close at $2.03 after the company released results from metallurgical testwork on mineralization from the Virginia silver project in Argentina. Bottle-roll leach testing recovered 80% of the silver from vein and breccia-vein material. However, the silver contained in the halo of lower-grade mineralization did not respond in the same way; on the contrary, recoveries from the halo-type ore were not economic. Mirasol is now working to identify the host minerals for silver in the halo with the goal to increase recoveries.
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