Vancouver Stock Exchange (December 23, 1991)

The outlook for resource issues on the VSE shifted from bad to worse during the week ended Dec. 17, with the resource index dropping by more than 40 points to 444.4. The composite index fared better, falling a more modest 20.39 points to 524.7. Gold didn’t help the situation, shedding a further US$3 to the US$357-per-oz. level after the previous week’s loss of about US$10.

News that Placer Dome does not plan to proceed with an agreement covering development of the Eskay Creek deposit affected the share prices of all players involved.

Under the deal, Placer could increase its holding in the property to a direct 50% interest by providing up to $240 million in capital and development costs. Placer stated that 50% of the project cash flow would not be sufficient to satisfy its financial objectives.

Prime Resources Group, which holds a 50% interest in the property, lost a third of its value following Placer’s withdrawal; it dropped $1 to finish at $2.05.

Adrian Resources followed suit, dipping to a 52-week low of 46 cents before closing at 47 cents. Adrian, through a joint venture with Prime, holds a 50% interest in the claim gap which covers a portion of the Eskay Creek deposit. Rumors that Placer has reassigned most of the team involved in feasibility studies on the Mt. Milligan copper-gold project in north-central British Columbia are heating up speculation the project will be shelved and/or written down. Placer is expected to make an announcement on the project shortly.

These rumors did not seem to faze Taseko Mines, which managed to touch a 52-week high of $10.75 before settling at $9.25 for a 50 cents gain on the week. Taseko is searching for a buyer for its large Fish Lake copper-gold project west of Clinton, B.C.

Negative comments on Dessir Resources from analysts following a recent visit to the Gibbs property in Mariposa Cty., Calif., did not help the company’s beleaguered share price. Dessir, which is in the process of earning a 50% interest in the property, fell 68 cents to $1.12.

Prime Equities International, which controls a number of junior resources companies, followed the general market downtrend, losing 94 cents before settling at $1.65.

Battle Mountain Gold issued a new reserve estimate for its Crown Jewel joint venture with Crown Resources in northeastern Washington state. Reserves increased to 8.7 million tons grading 0.19 oz. gold per ton. Battle Mountain hopes to complete a feasibility study on the project by the end of March. The company must fund all costs to bring the property into production at a minimum of 3,000 tons per day to earn a 51% interest from Crown. Crown finished the period down 50 cents at $9.13.