Juniors rebound on back of stronger gold price

On the heels of last week’s positive trading period, TSX Venture Exchange-listed companies continued to gain ground as the gold price climbed higher, owing to a weaker U.S. dollar. The S&P-TSX Venture Exchange index continued its climb from Sept. 22-28, closing at 1583.36 — a gain of 53.24 points, or 3.5%, over the previous trading period.

New York spot gold topped US$412.30 an ounce at the end of the period to close at its highest level in more than five weeks; it started the trading period at around US$408.30 per oz. Capital is moving into gold stocks again, reflecting the yellow metal’s reputation as a safe haven for investment in times of uncertainty. And there is plenty of uncertainty, with record high oil prices topping US$50 per barrel, not to mention the U.S. presidential race and geopolitical strife. The rise in gold prices is likely to continue as oil prices increase and the greenback weakens.

Bullish comments by Goldcorp Chairman Robert McEwen at the Denver Gold Forum didn’t hurt either. He reportedly predicted gold prices would reach US$850 per oz. over the next few years.

In other metals, silver rose US6 to close at US$6.61 an ounce. Silver followed gold higher to close at US$6.59, up US25, or nearly 4%.

Platinum group metals were mixed over the period: platinum lost US$28 or more than 3% to close at US$822 per oz. while its poorer cousin, palladium, gained US$12, or more than 5%, to US$221 per oz.

Nickel saw a nice gain of 6% as it rose US38 to US$6.50 on supply-side concerns. Copper closed up a few pennies at US$1.37 per lb.

Topping the volume leaders was JNR Resources, with more than 3.9 million shares trading hands and tacking on 22 to close at $1.40 per share. The company continues to be fuelled by higher uranium prices that have just reached a milestone at US$20 per lb. in the spot market. JNR and partner International Uranium intersected high-grade uranium while drilling at their Moore Lake property in Saskatchewan.

Spider Resources was a volume leader with more than 2.5 million shares changing hands. Spider’s shares closed even at 13.5. The junior reported that a strong conductor had been interpreted below McFauld’s No. 3 zone and that hole 46 had intersected 3% copper over 5.5 metres. It is partnered with KWG on the McFauld’s project, near Thunder Bay, Ont.

Another active stock, Bell Coast Capital, saw more than 2.3 million shares change hands. The shares gained 3 to close at 15 following an announcement that drilling had begun on the Shadow Mountain project in Mongolia (the program was sparked by geophysical indications of anomalies at depth).

With 1.8 million shares traded, Stikine Gold finally hit the top of the Alderidge Formation after folding shifted it even farther down than anticipated. The targeted Sullivan Horizon is believed to be 50-100 metres away. Shares gained 6.5 to close at 54 at the end of the trading period.

Santoy Resources gained 50% to close at 15 on a volume of nearly 1 million shares, placing it high on the list of top percentage gainers. The company plans to raise $300,000-$800,000 by way of a convertible debenture or equity issue for its coal and coal-bed methane properties and uranium opportunities.