Vancouver Stock Exchange Market crash totally unexpected

The Vancouver market has been sliding for over a month but Monday’s crash was totally unexpected. Ironically it happened three years to the day after the infamous Black Friday of Oct 19, 1984 when a small group of stocks collapsed for no apparent reason. Vancouver has a reputation for being highly speculative — and justifiably so — but the bloodbath on New York and Toronto suggests there’s been plenty of speculation there as well.

The VSE index was off 179 points Monday and the following day’s drop was a record 226 points as panic-swept markets around the globe collectively hemorrhaged bringing back memories of the now-eclipsed crash of 1929. Monday’s market loss on New York was $500 billion (US) which is pretty heady stuff — and exchange losses worldwide must have been in the trillions.

The decision by the major industrialized nations (G-7) to lower interest rates has provided much needed liquidity to all markets. Today, New York and Toronto were up strongly in early trading as was Vancouver where the index was ahead 147 points to 1,466. In the five trading days ended Tuesday, the index had tumbled 496 points, the equivalent of Monday’s drop in the now somewhat diminished Big Apple.

Among the more active traders at presstime was Tundra Gold which climbed 70 cents to $2.60 on 447,000 shares. The company has been heavily promoting its Lamaque project in Quebec, a joint venture with Teck. Black Swan, whose shares were recently split four-for- one, recovered a bit and gained 45 cents to $2.30. The company’s Gabanintha gold project in Western Australia will be officially opened Oct 30. We expect to have a field story on the project in the coming weeks.

Alotta Resources was 35 cents stronger at $1.10 in heavy volume and Kam Creed was also active and 31 cents higher at $1.25. Alotta has four drills operating at its Lac Simard project 80 miles south of Val d’Or, Quebec. Kam Creed says a pilot plant has been constructed on its Coronel project in Brazil for the recovery of gold and diamonds (nice combination).

Casualities were the order of the day over our report period and there were many. Cal Graphite, which has announced plans to bring its flake graphite property into production, fell $5.25 to $7.25. Skyline Explorations plummeted $4.50 to $10 and a lot of that was probably European selling. The company has a big overseas following. Breakwater Resources, whose main asset is a 49% interest in the Cannon mine at Wenatchee, Wash. tumbled $3 to $5.13.

Delaware Resource Corp, which has ground near Skyline’s new mining development in northwestern B.C. dropped $2.50 to $6.00 as did Cornucopia which ended the week at $3.50. The latter has been exploring its Ivanhoe property in Nevada. Chelsea Resources, whose Spotted Horse gold mine at Lewistown, Mont. is now in production, fell $2.05 to $3.20. Aber Resources, which is actively exploring a number of properties in the N.W.T. dropped 90 cents to $1.90.