STOCK MARKETS — Diamond stocks dominate Toronto market

Diamond issues emerged as mining stocks of choice during the week ended Sept. 8 as market players awaited further results from the Lac de Gras region and other active plays.

But while Canadian investors hailed the diamond rush as the best thing to hit the mining industry since Hemlo, shares of De Beers continued their rapid decline on NASDAQ. Analysts are concerned that a combination of a prolonged global recession and increasing supply from Angola will weaken De Beers and even break the cartel that maintains diamond prices at artificially high levels.

United Reef Petroleums, an affiliate of Canhorn Mining, took the top trading spot for the second week in a row as more than three million shares changed hands. Planning to launch an exploration program on a diamond prospect in The Central African Republic, the junior soared to as high as 42 cents before dropping back to 35 cents for a gain of 18 cents. United Reef shed half a penny today, Sept. 9.

Other active diamond stocks on The Toronto Stock Exchange were Pure Gold Resources, up 7 cents to 18 cents; Aber Resources, up 17 cents to $2.20; SouthernEra Resources, up 15 cents to $1.80; Tyler Resources, up 2 cents to 28 cents; and Westfort Petroleums, unchanged at 8 cents.

Shares of Sudbury Contact Mines gained 15 cents to $1.40, following news that the junior has discovered a second kimberlite pipe in the Kirkland Lake, Ont., area. A bulk sample from the pipe is currently being processed and drilling is expected to resume in October.

On the Montreal Exchange, KWG Resources remained unchanged at $3.35. The company has yet to launch its multimillion-dollar Spider #1 and Spider #2 projects designed to find a diamond mine in the Kirkland Lake or James Bay Lowland areas of northern Ontario.

Also listed in Montreal, Societe d’Exploration Miniere Mazarin emerged as the top trader, gaining 11 cents to 50 cents on 1.2 million shares. The junior and a group of business associates plan to spend $34.4 million to acquire the Quebec government’s asbestos interests.

One of those interests is Asbestos Corp., which mines asbestos in the Thetford Mines area of Quebec. Asbestos Corp. lost a quarter to close at $9.75. Mazarin owns gold and copper exploration properties in the province and is developing a graphite project near Fermont, Que.

Both the Montreal and Toronto exchanges reported a decline in the value of shares traded in August compared with July. In Toronto, value totalled $5.1 billion, off 22.3% from July while in Montreal, value dropped 4.9% to $1.4 billion.

Led by a 39-point advance in the gold and silver index, the TSE’s composite 300 index climbed 15.2 points during the report period. The gold price edged up US$2.70 to US$343.10.

Golden Star Resources, about to begin generating revenue from a gold mine in Guyana, hit a new high of $4.90 before dropping back to $4.80 for a gain of 50 cents.

The metals and minerals index bucked the trend, losing 33.6 points in sympathy with falling prices for nickel, copper and zinc.

Today, metals and minerals fell a further 22.7 points while Gold and Silver wiped out earlier gains by dropping 32.5 points. After reaching a new 52-week high of $37.50 last week, American Barrick Resources dropped to $36.88 today. Inco touched a new low of $30.88.

The Canadian Dealing Network saw some healthy trading action during the report period as investors speculated on results of a drilling program managed by Falconbridge on ground held by White Star Copper Mines near Timmins, Ont. Falconbridge is anxious to find a satellite of the Kidd Creek orebody, and has reportedly set up three drills in the area. Trading 179,200 shares, White Star gained 10 cents to close at $1.50. Neighboring property owner Chance Mining and Exploration picked up 2 cents to 40 cents on thin volume.