STOCK MARKETS — Continuing diamond weakness affects western

Investors who had been turned on by diamonds in recent years continued to “tune out and drop out” in droves this past week, as it became more apparent that finding an economic diamond pipe is no easy task.

A number of junior companies active in diamond exploration continued to show weakness during our report period ended at noon, Aug. 24; the weakness was attributed to fall-out from the disappointing results from the DO-27 (Tli Kwi Cho) pipe recently bulk-sampled by Kennecott.

However, the share prices of Kennecott’s junior partners appear to have hit bottom. Kettle River Resources inched up 2 cents at $1.72, while Dentonia Resources was off a penny at 79 cents. ASE-listed Horseshoe Gold Mining was up 4 cents at 75 cents over the week.

At the end of our report period, Vancouver’s composite index was off 20 points at 857 from a week ago, while the resource index was off 27 points at the 1,350 level for the week.

In the mineral sector, Murray Pezim’s Starcore Resources was the most active issue, although off 15 cents at 55 cents. The company has been drilling its Goodnews Bay project in Alaska as part of an agreement to earn a 70% interest. The project area has produced 650,000 oz. platinum from placer deposits which drain several ultramafic complexes. So far, five holes of an 8-hole program have tested these complexes. Assay results are not yet in hand. Athena Gold was down a dime at $1.55, following last week’s flurry of trading. TSE-listed Miramar Mining is acquiring all Athena shares at the price of one Miramar share for every 2.8 Athena shares. Athena’s main asset is the Talapoosa gold-silver deposit in Nevada.

Junior Aquiline Resources bucked the overall downtrend on western markets, posting a hefty gain of 90 cents to reach $2.20. The company recently signed a joint-venture agreement with Noranda Exploration (Norex) for further work on its San Isidro copper property in southwestern Mexico. Work to date has outlined 20-70 million tons, grading 0.65-1.15% leachable copper, that are minable by open pit. But the project has plenty of blue sky in that a much larger, underlying resource of porphyry-type copper mineralization extends to depth. Aquiline has other projects in Michoacan state, and agreements for separate joint ventures with Norex are expected shortly.

Norex can earn a 51% interest in San Isidro through cash payments to Aquiline and exploration expenditures of US$2 million by April of 1996, plus an additional 24% stake by spending a further US$2 million.

Minefinders also continued its upward trend, ahead 55 cents at $5. The junior is exploring a gold-silver project in Mexico and has several projects in the U.S.

Back on the diamond front, Leicester Diamond Mines saw its share price reduced by 50% to trade at 25 cents after announcing that results of bulk-sampling programs showed grades “insufficient” to justify continuing its diamond project near Kimberley, South Africa. The company and its joint-venture partners do not intend to exercise an option to buy the property.

Leicester now intends to turn its attention to Victoria Island, N.W.T., where it will fund an initial exploration program on ground held by Cominco. The company can earn up to a 90% interest. However, once a kimberlite target has been defined which warrants bulk sampling, Cominco will have back-in rights to a 51% interest.

Results are also awaited from a small bulk sample taken from the Torrie pipe on the Yamba Lake project in the Northwest Territories. Investor anxiety is being reflected by some see-saw trading in the two juniors holding interests in the project. Mill City Gold Mining was off 4 cents at 92 cents, while Alberta-listed Tanqueray Resources was up 15 cents at $1.65.