THE STOCK MARKETS — Gold’s fall squeezes resource index

A further drop in the price of gold, to the US$372.40-per-oz. level, was not welcome news for western markets during the week ended April 19. The slide brings the cumulative decline in the past month to about US$20 per oz.

Gold’s weakness, combined with losses on major eastern markets, pushed the Vancouver Stock Exchange composite index down by slightly more than 40 points to 1,093.75. The resource index was also hurt, finishing at 1,734.61 for a loss of 58.52 points.

Golden Unicorn Mining (VSE) was the top trader on the VSE, with more than 2.7 million shares changing hands. The issue was halted at the request of the VSE and last traded at $1.25 for a gain of 82 cents on the week. The Exchange is seeking clarification of the company’s affairs, in particular regarding rumors of a diamond find.

Prior to this request, the company said it was unaware of the reason behind the recent trading activity, except that it may be related to an ongoing due diligence review and possible participation in a gold-silver-diamond property in British Columbia.

General market uncertainty appears to be hurting St. Philips Resources, which lost 70 cents to trade at the $2.30 level. El Condor Resources, the company’s 60% joint-venture partner in the South Kemess property in north-central British Columbia, lost 38 cents to close at $6.25.

Earlier this year, Pegasus Gold made an offer to acquire all the issued shares of El Condor for $7.50 a share and it is now completing a due diligence review.

Gold-related selling pushed Cumberland Resources down 50 cents to $2.50. The company is planning an extensive exploration program on its Rankin Inlet, N.W.T., joint-venture properties with TSE-listed Comstate Resources. Aquiline Resources bucked the general downtrend, adding 33 cents to close at $1.19. An initial 5,000-tonne leach test on its Cieneguita gold project in the Mexican state of Chihuahua returned recoveries of 70-75%. TSE-listed Glamis Gold is earning a 60% stake in the property by advancing it to a production decision. Active property acquisition and exploration work in Argentina helped Argentina Gold add to previous gains. The issue finished up $1.20 at $6. Golden Hat Resources added 6 cents to finish at 22 cents after announcing that it had opened preliminary negotiations to obtain part of a large prospective diamond concession in the Northwest Territories. The acquisition of an option on a copper-cobalt property in the Boleo district of Baja California, Mexico, helped Copperstone Resources add a nickel to finish at 51 cents. Copperstone can acquire an 80% interest in the property from Island-Arc Resources, which finished unchanged at $1.40. American Bullion Minerals closed up 45 cents after announcing plans for a special warrant offering at $2.15 per unit to raise up to $5 million. Proceeds from the placement will be used to fund drilling and prefeasibility work on the company’s Red Chris project in British Columbia. VSE-listed Dentonia Resources, ASE-listed Horseshoe Gold Mining and TSE-listed SouthernEra Resources announced plans for a 3-way merger to consolidate their diamond project interests in the Territories. Exchange ratios will be determined through the course of negotiating the merger agreement. Dentonia closed down 63 cents to $6.88 and Horseshoe was off 50 cents to $6.13.

Positive results from a bulk test of tailings from the Albino concession in Venezuela did not help partners Crystallex Resources and Eurus Resource. Crystallex closed down 50 cents to $6.38 while Eurus lost 3 cents to close at 77 cents.

The bulk test, using a nearby cyanide mill, netted the joint venture 1,600 oz. gold for an average gold recovery of 94.9%. The joint venture expects to complete construction of a 400-ton-per-day mill by July.