STOCK MARKETS — Golds remain active despite drop in price

Gold’s more-than-US$10-per-oz. drop during the period ended Jan. 25 had Western markets backtracking.

The Vancouver Stock Exchange resource index lost more than 50 points to close at 1,722.22, while the composite index fared better with an 8.43-point drop to the 1,116 level.

Trading in El Callao Mining was active, with more than 1.8 million shares changing hands. The company, which is exploring for gold on a large ground position in Venezuela, lost 48 cents to close at $4.65.

Bolivar Goldfields, which holds ground in the same area, slipped 63 cents to close at $5.50. The company recently released trenching results from its Tomi concession, where one trench returned 0.27 oz. gold per ton over 335 ft. St. Philips Resources bucked the trend, adding 86 cents to close at $3.65 in a game of catch-up with El Condor Resources, its 60% partner on the South Kemess copper-gold project in British Columbia.

Evidently, Pegasus Gold is considering buying the project, which at last report contained an estimated minable reserve of 220 million tons grading 0.22% copper and 0.018 oz. gold.

Based on El Condor’s share of $5.87, the project is capitalized at about $140 million. At $3.65 per share, St. Philips’ price would capitalize the project at about $100 million.

With a capital cost to develop a 44,000-ton-per-day mine estimated at about $374 million, the total bill for Pegasus to buy the property and get it up and running would be more than $500 million. Estimated annual output is 213,000 oz. gold and 58 million lb. copper at pro-rated cash costs of US$206 per oz. and US60 cents per lb., respectively.

A private placement of one million units at 40 cents each brought Lysander Gold back to life with a 30 cents gain to 55 cents. The company plans to use the funds to evaluate and acquire “several major gold and diamond prospects in Brazil.”

Kalahari Resources added 25 cents to close at $1 after announcing that satellite imagery data for its Back Lake property in the Northwest Territories revealed features similar to the known kimberlite pipes in the Lac de Gras area. Joint-venture partners War Eagle Mining and Great Western Gold continued to forge ahead. The companies have intersected a second kimberlite pipe on their Candle Lake property in Saskatchewan. Analysis of the core for diamond content may take a while, but, in the meantime, investors pushed War Eagle up 95 cents to $3.15 while Great Western added 50 cents to close at $3.60.

Drill results from the Decker option in Ontario helped KRL Resources post a gain of 12 cents to 52 cents. SEG Explorations is earning a 75% interest from KRL and reports a 7.5-ft. intersection grading

0.48 oz. gold in one hole and a 3.3-ft. intersection in another, grading 3.16 oz. SEG did not fair as well, finishing down 4 cents at $1.

Zappa Resources continues to shine, adding a further 88 cents to close at $3.65 — almost triple what it was at the beginning of the year. Zappa was the subject of a recent writeup by a U.S. market letter and the company holds several gold properties in Ecuador. Zappa expects to drill-test three bulk-tonnage targets on its Ponce Enriquez property in April. A private placement of 4.7 million units at $3.25 each gives Namibian Minerals more than $15 million with which to explore and develop its diamond concessions off the west coast of Namibia and South Africa. The issue finished down 35 cents at $3.60.

Prime Equities, which has been relatively quiet during the current boom in the junior gold market, finally showed some muscle, jumping 90 cents to $4.15. The company owns share positions in several junior explorers and also plans to take an active role in exploration.