Aber share volume heavy as staking activity continues

Diamonds proved to be a mining investor’s best friend during the week ended May 26 as a number of issues responded to the latest developments in the Lac de Gras, N.W.T., area.

Since partners Dia Met Minerals and BHP-Utah Mines confirmed that gem-quality diamonds have been found in their 160-ton bulk sample, well over four million shares of neighbor Aber Resources have changed hands. As Aber has a large block of ground surrounding the Dia Met play, investors are betting that it will be the next company to report diamonds on its property. Judging by this week’s rise in the price of SouthernEra Resources, investors are hoping for a diamond find on its 540,000-acre claim block east of the discovery area. While Aber slipped back from a high of $2.23 today, May 27, SouthernEra soared to a new 52-week peak of $1.73.

Richardson Greenshields analyst David James expects the Lac de Gras area, where 10 million claims have been staked, to outstrip Eskay Creek and Hemlo in terms of speculative activity. Unconfirmed rumors that Dia Met has found seven kimberlites on its property are helping to fuel the activity because kimberlites usually occur in clusters and will likely be spread over a very wide area. Tyler Resources, which has property adjoining Dia Met to the north, was also a big trader this week. However, it closed down 1 cents at 23 cents today on a volume of 216,200 shares.

Well-connected sources have told The Northern Miner that Aur Resources is actively looking for diamonds in the Northwest Territories, although not in the Lac de Gras area. Don Bubar, Aur’s exploration vice-president, declined to comment. The stock climbed 6 cents to $2.79.

On the broad market, share prices reacted to the lowest interest rates in 19 years and to indications that Saudi Arabia may be preparing to raise its oil prices which have already climbed to a 6-month high of US$22 per barrel. Trading in oil stocks helped Toronto’s 300 composite index to scratch out a 0.56 point gain today to close at 3382.86 on a volume of 27.7 million shares valued at $307 million.

In keeping with recent activity, there was little movement in the price of gold which closed in London at US$338.60 per oz.

Among gold miners, Royal Oak Mines moved up 9 cents to $1.90 after mobilizing a team of contract miners to replace striking workers at its Giant mine near Yellowknife, N.W.T. The main issues in the dispute between the union and Royal Oak include changes to overtime pay requirements and withdrawal of bus transportation. Gold miners Placer Dome and American Barrick Resources added 13 cents and 38 cents to their respective share prices.

In the base metal sector, Noranda lost 13 cents following speculation that the Bronfmans are preparing to sell shares of parent Brascan Ltd. to finance new share issues by Noranda and affiliate Noranda Forest. Inco, the Toronto-based nickel miner, added 63 cents to close at $35.88. Queenston Mining President Hugh Harbinson attributed the recent increase in share price and volume to his company’s recent acquisition of a 29% stake in copper-oxide explorer Thermal Exploration. Thermal is now a player in the Northwest Territories diamond hunt. A 4 cents increase today moved Queenston up to 94 cents from last week’s 70 cents trading level.

Finally, copper-oxide specialist Arimetco International lost some steam after some volume activity caused by its acquisition of a 50% stake in the MacArthur copper property, which is 4.5 miles from the Yerington mine of Arimetco. Arimetco moved down 5 cents to $4.65.