Juniors, metals prices show strength

Junior mining stocks appeared to be resurging over the trading period Jan. 4-11. The TSX Venture Exchange lost 15 points, or less than 1%, to close at 1772.53, largely owing to the weak gold price.

Although spot gold showed continued weakness over a good part of the trading period, it appeared to be turning the corner as the period ended and closed at US$422 per oz. in New York. The weakness in the U.S. dollar, along with a pending increase in demand owing to the Tsunami’s destruction in Asia should drive gold higher in the long term. Silver regained some ground, closing 2% higher to US$6.95 per oz. Platinum meanwhile gained 2%, closing up US$17, to US$862, while sister metal palladium gained nearly 9%, picking up US$16 to close at US$194 an oz.

Base metals reversed the previous week’s downward trend as fundamentals remained strong. Nickel gained more than 6%, or 42, to close at US$6.76 per lb. while copper closed 4% higher at US$1.43.

The gap narrowed between winners and losers. The trading period saw 31 new 52-week highs for Venture Exchange-listed companies as 59 companies reached new 52-week lows.

Topping the most-active list, for the third consecutive week, was Calgary-based Tyler Resources. The company traded more than 13.1 million shares and reached a 52-week high to close at $1.42, up 28 after dipping to a low of 68. The wild fluctuation occurred after the company reported its widest copper-mineralized interval in a diamond drill hole — only a day after spooking the market by releasing disappointing results from an initial reverse-circulation hole at the Bahuerachi copper project in Chihuahua state, Mexico. The star core hole intersected 143 metres averaging 0.71% copper, 0.22% zinc and 6 grams silver per tonne from 16 metres depth, and ended in mineralization. The company raised another $1 million to fund the 2005 work program at Bahuerachi.

Second on the most-active list was Vancouver-based Adobe Ventures, which traded in excess of 5.8 million shares. The company recently acquired the right to upgrade and operate a coal mine in Sardinia. Endeavour Mining Capital purchased another 1.3 million Adobe shares to hold 19.9% of its outstanding shares.

Dianor Resources traded nearly 1.9 million shares, closing even at 30. Recent technical data from the company’s new Leadbetter property confirm diamond-bearing bedrock exposed over 505 metres. Rock sampling recovered 53 diamonds from five bedrock sample locations. The company is also active at various diamond-exploration projects in Eastern Ontario and Quebec.

Roca Mines gained a nickel to close at 40 on a volume of 1.7 million shares. Independent economic scoping studies are being conducted on the company’s MAX molybdenum project, which is 60 km southeast of Revelstoke, B.C. Prices for molybdenum have been rising dramatically over the past year and now exceed US$34 per lb.

Limestone developer Birch Mountain Resources saw more than 1.4 million shares change hands. The company tacked on 30 to close at $2.40. Birch Mountain is advancing its Hammerstone limestone project in northeastern Alberta to serve the oil sands industry in the Fort McMurray region.