Weaker than expected U.S. job numbers, low U.S. manufacturing figures and an oil price well above $50 per barrel all proved to be good news for gold bugs this past week. In fact the price of bullion hit levels last seen in early May and junior resource stocks responded accordingly. The TSX Venture Exchange, home to the most junior exploration issues, posted gains for the second straight week, adding another 2.5%.
Guyana Goldfields caught a few eyes after tabling impressive drill results from its wholly-owned Aurora property in Guyana. In the Rory’s Knoll area, hole 34 cut 11.53 grams gold per tonne over 105.7 metres. Within this broad zone was a higher grade section running a mind boggling 68.1 grams gold per tonne over 15.7 metres. The company tacked on C$0.80 to C$2.80 on heavy volume.
Another company that came up with nice numbers was Lake Shore Gold. Results from its resource expansion drilling program on its wholly-owned Timmins West gold property in Ontario yielded up to 24.03 grams gold per tonne gold over 11.1 metres and 13.62 grams gold per tonne gold over 2.1 metres. Lake Shore ended the week up C$0.05 to C$0.80.
It was wild ride for shareholders of St. Elias Mines. In a case of buy on rumor, sell on news, the recently heavily-traded stock surged as high as C$0.41 before settling down to C$0.26, up C$0.01 on the week. The run up in the junior’s stock corresponded with news that their latest hole drilled on the Jales-Gralheira gold property in Portugal intercepted a vein 529 metres down. But with no assay results yet, the movement seemed premature.
Well, as it turns out a deal was in the works. You see, a company called Hi Ho Silver Resources has inked a deal to earn a 70% interest in St. Elias’ Carmi molybdenum property in British Columbia. The price tag would be $7 million in exploration spending, 1.5 million shares and $75,000 in cash over a three year period. The property hosts an indicated resource of 22.77 million tons grading 0.110% MoS2.
Over on the big board, Eldorado Gold made news by inking a deal to take out fellow Toronto-listed Afcan Mining. Afcan’s main asset is an 85% stake in the Tanjianshan gold project in Qinghai Province in Western China. Eldorado ended the week at C$2.88, down C$0.13, while Afcan closed unchanged at C$0.42.
After a more than 2-week trading halt, Augusta Resource came out with some compelling news. The company inked a deal to acquire the Rosemont Ranch copper deposits in Pima County, Arizona. Rosemont hosts 340.5 million tonnes grading 0.64% copper and 0.02% molybdenum. Augusta can buy the property by paying US$20.8 million over three years. So far, Augusta has paid US$6.66 million.
Where did the money come from? A one year C$6 million convertible debenture. The debenture has a one-year term with 50 percent due in six months and the balance due in one year, bearing interest at the rate of 9 percent per year. At the option of the holder the debenture is convertible into 2.18 million common shares of the company at a price of $2.75 per share. The company will also issue 363,363 shares at a deemed price of $3.30 each as a bonus. That’s nearly a C$1.2 million bonus. Armed with a robust $55 million market value, investors took profits driving the shares of Augusta down C$0.25 to C$3.05 on over 1.8 million shares traded.
Despite the fact that the uranium price didn’t move upward from a current US$29 per pound, the uranium explorers posted a generally positive week with Energy Metals adding C$0.10 to close at C$2.50, Standard Uranium jumping C$0.08 to close at C$1.23, International Uranium Corp. tacking on C$0.30 to close at C$5.55, Uranium Power adding C$0.04 to C$0.53, while Strathmore Minerals surged C$0.17 to C$1.95.
It was another good week for the gold miners with Placer Dome closing at C$17.60, up C$0.42, while Barrick Gold added C$0.17 to close at C$28.87. But Goldcorp was the big winner, adding C$1.19 on the week to close at C$17.84.
Moving forward all eyes will be on the price of gold as a break through the $430 per ounce mark could spell a quick move back to the recent high of $460. But only time will tell…. so stay tuned.