Venture board weakened by gold’s drop

Junior explorers suffered continued losses over the March 29-to-April 4 report period as the S&P-TSX Venture Composite Index shed 16.07 points to close at 1886.28. Average daily trading volumes also dropped, falling to 46 million shares.

Gold continued to underperform, dropping US$2.70 to close at US$422.80 per oz. on the New York spot market. Anticipation of further interest rate increases by the U.S. Federal Reserve (designed to bolster the dollar and keep inflation in check) kept bullion prices down, and speculation of possible gold sales by the International Monetary Fund only suppressed them further.

Copper regained a couple of pennies to close at US$1.54 per lb. Nickel likewise took back some ground and ended the session at US$7.32 per lb., up US8 from the previous week’s close.

The weakened gold price largely determined the weekly tally of new market highs versus new lows. Just 28 companies managed to reach 52-week highs, compared with 80 Venture-Exchange-listed explorers falling to new annual lows.

Northwestern Quebec explorer Alexis Minerals grabbed top place among volume leaders, with 10 million shares trading. The junior gained 23, or 49%, to close at 70. Alexis and joint-venture partner Noranda reported impressive base metal values from drilling on the West Ansil property, near Rouyn-Noranda, Que. Hole 4 intersected 53 metres grading 3.6% copper with zinc, silver and gold values. Higher-grade sections of more than 5% copper were encountered in 32- and 11-metre intervals separated by a 9-metre diorite dyke. The project is less than 2 km southwest from the past-producing Ansil copper-zinc mine, which operated from 1989 to 1993.

Freewest Resources Canada traded the second-highest number of shares, 5.9 million, and closed up a nickel at 40. The volume reflects investor interest in the Windfall high-grade gold project in Quebec, as well as the Sungold base metals project in Ontario. Freewest has also acquired the Home Lake zinc-copper project, 3 km along trend from Sungold.

The third most active trader was Tyler Resources, which swapped 4.9 million shares and shed 4 to close at $1.75. Further drill results were released from Tyler’s Bahuerachi polymetallic project in Mexico. Hole 21 cut 141 metres grading 0.4% copper, including 11 metres of 1.6% copper, plus silver and zinc values.

One of the top percentage gainers, UGL Enterprises increased in value by 50% to close up 30, at 90, on high volumes before trading was halted. The company announced it had acquired the Nergui uranium project in northern Mongolia. Summary reports filed at the Mongolian mines department (based on previous Russian work) mention high-grade zones in the range of 4-10% uranium over several hundred metres of length and widths of 30-40 metres. Unfortunately, soon after announcing the acquisition, UGL discovered a transcribing error in the grades, prompting it to request a trading halt to allow for clarification.

Messina Minerals dropped $1.23 to close at $2.52, following results from four holes drilled at the Boomerang zone in Newfoundland.