STOCK MARKETS — Juniors bear brunt of lacklustre Km 88

Junior companies active in Venezuela had little to cheer about after generally disappointing results were released from highly promoted gold properties held by TSE-listed Vengold in the South American country.

Although Vengold says it sees the results as encouraging, investors were not so bullish, and the share prices of Vengold and other juniors active on nearby projects took a tumble. This trend was partly offset by continued interest in diamonds, which generated positive upward movement for a number of issues active in Canada’s North.

Trading activity on western markets was relatively brisk during the report period ending at noon July 27. The Vancouver Stock Exchange’s resource index gained 28.54 points at 1,564.56, although the composite index was off 4.19 points at 921.63 from last week.

Canadian Industrial Minerals took top trading spot this past week, posting a 21 cents gain to settle at $1.14. The market activity is related to a recent oil discovery on an offshore concession in Nigeria, according to President Gene Webb.

Latin American Gold was also active, although the issue was down 21 cents at $2.14 after announcing details of an agreement to acquire interests in concessions in Venezuela’s historic mining district of El Callao. The company has rights to buy up to 80% of a land package encompassing four concessions in the district. The Choco concessions are about 5 km southwest of the Minerven gold mine, on the southern flank of the El Callao greenstone belt in Bolivar state. The junior has other concessions in Venezuela and is reviewing opportunities in Argentina, Ecuador, Mexico and Peru. Several juniors active in Venezuela posted losses this past week. Canarc Resource was off a quarter at $3.35, while Carson Gold slipped 50 cents to the $2.40 level. Bolivar Goldfields also lost ground, falling $1 to trade at $2.35.

Tako Resources was up 18 cents at 31 cents after announcing plans to acquire an initial 50% interest in certain claims in Quebec’s Aiguebelle Twp. Other than these plans for the Fayolle property, the company said it knows of no reason for the recent market trading activity in its shares. The share price of Madison Enterprises was almost reduced by half after the junior announced a revised geological resource for the Palmilla gold-copper deposit in Panama. The issue was off $1.55 at $1.60. The property is under option from Adrian Resources, whose recent drilling showed that the deposit’s potential is more limited than originally hoped.

The revised geological resource, based on the influence of four recent drill holes, is 14 million tons grading 0.03 oz. gold and 0.3% copper, down from a previous estimate of 17.7 million tons grading 0.029 oz. gold and 0.31% copper.

Diamonds maintained their sparkle over our report period, particularly as three juniors holding interests in the Tli Kwi Cho kimberlite project finally agreed to agree on a merger proposal. A new company, DHK Diamonds, is to be formed by merging the three equal owners of DHK Resources: Kettle River Resources, Dentonia Resources and Horseshoe Gold Mining.

Sources say much of the credit for the breakthrough goes to Peter Brown’s Canaccord Capital, which supported the idea and helped all three parties set aside a few differences for the greater benefits of a more streamlined vehicle with a 35% interest in one of the more advanced diamond projects in Canada’s North. Market reaction was positive. Kettle River was up $2.87 and trading at more than $11 at presstime, while Dentonia posted a gain of $1.25 to trade at the $6.50 level. Alberta-listed Horseshoe Mining was up $1.50 at $6.50.

A modest trading flurry in Teryl Resources followed an announcement of a drill program on the Mt. Sidney Williams gold project near Fort St. James, B.C. The issue was off 7 cents at 51 cents, however, as assays are not yet available.