STOCK MARKETS — Higher gold price can’t shake western

With gold near a 2-month high, at just below US$390 per oz., even the recent steep jump in the bank rate failed to shake western markets.

The Vancouver Stock Exchange resource index shot up 58.85 points to close at 1,809.88, while the composite index finished at 1,155.81 for a gain of more than 18 points.

War Eagle Mining and Great Western Gold came off a trading halt with strong performances after announcing results from their Candle Lake diamond joint venture in Saskatchewan.

War Eagle jumped $1.25 to $8.25 while Great Western added $1.37 to close at $8.50. The companies reported the discovery of 12 diamonds from samples weighing a total 59 kg from three kimberlite pipes.

Analysts John Kaiser and Andrew Muir at Pacific International Securities note that although the find is significant in that diamonds were discovered, the results are a far cry from justifying the companies’ market capitalizations. Merger partners Commonwealth Resources and Toronto-listed Aber Resources announced they intend to make an offer for all the shares of Dentonia Resources. Dentonia jumped $1.50 on the news to close at $7.63 and announced it has entered discussions with Alberta-listed Horseshoe Gold Mining regarding a potential merger. Horseshoe added 88 cents to finish at $6.88. Kettle River Resources, a partner of Dentonia and Horseshoe on the WO claim block under exploration by Kennecott in the Northwest Territories, reacted by adopting a shareholder protection plan to ensure fair value is received in the event a takeover bid is made. Kettle River closed up 25 cents at $10.88. Continuing investor interest in Taseko Mines pushed the issue up $2.75 to a new high of $21.75 on excellent volume. Taseko is close to completing a prefeasibility study at its Fish Lake project in British Columbia and management hopes to find a buyer for the property.

At last report, Fish Lake contained estimated minable reserves of 744 million tons grading 0.23% copper and 0.013 oz. gold per ton, with an overall strip ratio of 1.57-to-1.

Sutton Resources rocketed to a new high of $51 before settling for a gain of $11.50 at $50.50. The company’s joint venture with BHP Minerals on a large nickel-cobalt belt in northwestern Tanzania is generating a great deal of interest from investors in the U.S., according to Sutton.

Plans to acquire additional concessions in Ghana and Burkina Faso appear to be helping Mutual Resources. The company jumped 75 cents to $2.50 and is planning to begin an extensive airborne geophysical survey over southwest Ghana to identify targets for gold exploration.

Drilling is under way at the Yamba Lake diamond prospect in the Northwest Territories. Partners Mill City Gold Mining, Tanqueray Resources and Fibre-Klad Industries plan to drill 20-25 holes on the Torrie kimberlite pipe in order to obtain 25-30-ton bulk samples. The market bid up all three stocks, with Mill City finishing 19 cents higher at $2.25, Tanqueray ahead 45 cents at $4.25 and Fibre-Klad ahead 45 cents at $3.65.

Wide gold-silver-copper intersections at its La Fortuna property in Mexico helped San Fernando Mining tack on 48 cents to close at $5.38. Results included a 190-ft. intersection grading 0.16 oz. gold and 1.79 oz. silver plus 0.74% copper, and a 233-ft. intersection grading 0.15 oz. gold, 0.61 oz. silver and 0.4% copper.

Consolidated Madison Holdings jumped 60 cents to $3.75 after announcing plans to option a 65% interest in its Fontes e Lacerda gold property in Brazil to Toronto-listed TVX Gold.

The discovery of an outcropping kimberlite pipe at its diamond exploration prospect on Baffin Island helped Lumina Investment add 14 cents to close at 94 cents.