Toronto Stock Exchange Replay of Hemlo excitement in store at Eskay

The exciting Eskay Creek gold play in northwestern British Columbia’s Stikine Arch helped an otherwise dreary gold sector shake off some lethargy during the week ended June 19. Analysts had predicted that the Eskay Creek gold discovery could blossom into a replay of the Hemlo excitement seen during the early 1980s. So far, that prediction has been borne out true, but most of the action is taking place on the Vancouver Stock Exchange.

Although the bullion price was an unimpressive US$346.90 on the second London fix, several mining companies with claims in the Eskay play managed to post healthy gains by presstime.

The gold and silver index moved 2.9% higher to 5871.09 points during our report period, while the metals and minerals index was fractionally better at 3188.01 points, a gain of 0.22% on the week.

Total trading volume was a lacklustre 20.5 million shares with the TSE 300 composite index virtually unchanged at 3,530.48 points.

Holder of a one-half interest in the high-grade 21-zone at Eskay is Stikine Resources which traded 728,500 shares to reach a high of $70.50 before falling back to $70. Operator Prime Resources has drills turning on the property at present.

Rival senior companies Placer Dome and Corona are engaged in a fierce bidding war for control of Stikine. That takeover battle is still far from finished (see story). Shares of Placer Dome were better by 75 cents to close at $17.75 while Corona slipped lower to $7.13 on a big volume of more than three million shares.

Meanwhile, shares of Bond International Gold, which has a huge land position near Stewart, B.C., remained unchanged at $8.25. Bond’s parent LAC Minerals tacked on 25 cents to its share price before closing at $10.50. LAC is exploring several significant gold discoveries made last year by Bond at Red Mountain near Stewart.

Elsewhere in the Eskay play, Newhawk Gold Mines traded 81,800 shares for a gain of 10 cents with the close at $2.50. The company, which is 42% owned by Corona, has a 60% stake in the Sulphurets gold property in the “Golden Triangle” of northern British Columbia. Preliminary reserves for the West zone of the Sulphurets property stand at 715,400 tons grading 0.431 oz. gold per ton. An 18,000-ft. drill program is under way to test the down-plunge extend of the zone, and a final feasibility study is expected by late August.

Other companies holding ground in British Columbia’s Golden Triangle are Cathedral Gold which gained 7 cents to close $1.47 and Tymar Resources which added 10 cents to its share price of $1.60. Cathedral Gold plans an $850,000 exploration program at its Bronson Creek claims in the heart of the Iskut River gold camp. The Bronson claims lie adjacent to the Johnny Mountain mine of Skyline Resources.

Meanwhile, the silver price dropped to US$4.82 in London and put further pressure on the already depressed shares of United Keno Hill Mines. News that Sudbury- based Bharti Laamanen Mining is acquiring Falconbridge’s 45% stake in United Keno had little effect on the issue which closed 14 cents lower at $1.55.

In the base metals area, shares of all three companies involved in northern Quebec’s Louvicourt Twp. copper-zinc discovery were active. Aur rose to $4.35 gaining 30 cents, while Societe Miniere Louvem was up by 60 cents to $4.70, and St. Genevieve was 17 cents better to $1.27. Company officials were unavailable for comment at presstime. The sudden trading activity caused some analysts to speculate that an out-of-court settlement is being negotiated between Aur and Louvem.

Shares of Noranda gained 50 cents to close at $20 on news of a significant zinc intersection on the company’s Lynne project in Wisconsin. A recent hole, completed to test an airborne geophysical anomaly, intersected 128 ft. grading 22.7% zinc, 0.64% copper, 2.95% lead along with precious metal values. Two diamond drill rigs are currently on the property to further delineate the deposit.

In the uranium sector, news that Rio Algom has recently acquired an 8% stake in the shares of Uranium Resources helped send that issue 34 cents higher to $2.20. Rio Algom also has the right to purchase up to a 25% interest in the Dallas- based uranium producer, and may ultimately try to take over all of the outstanding shares of the company.

Shares of Vancouver-based Royal Oak Resources rose 10 cents to 75 cents after the company signed an agreement to purchase the Canadian gold assets of Australian-based Giant Resources for $33 million. The agreement, scheduled to close on or before Sept. 27, does not include the 62% interest in ERG Resources (TSE) held by Pamour.

The deal will give Royal Oak effective control of Pamour, Giant Yellowknife Mines, as well as Pamorex Minerals and four other junior exploration companies.