Vancouver Stock Exchange (October 07, 1991)

Mark Twain’s satirical observation that October is not a good month for stock markets held a grain of truth in Vancouver this week as a number of stocks took a dramatic tumble after drill results from a project in northwestern British Columbia failed to live up to hype and an overworked rumor mill.

At presstime, noon Oct. 2, the most active issues were Springer Resources and Cove Resources, minority partners on the Unuk River project being drilled by Granges in the Eskay Creek region. Granges has 50% of the project and is operator, while Springer and Cove have 37.5% and 12.5% interests respectively. With rumors of “Eskay Creek-type” geology and a 90-ft. intersections grading over one ounce gold per ton, both juniors have been among the most active issues in the past week, with most of the activity on the buy side. Trading activity was frantic, and even Murray Pezim’s words of caution failed to dampen the buying binge.

But rumor and fanfare were laid to rest when Granges released the latest drill results, several of which failed to intersect significant mineralization. The best new result was 19.7 ft. of 0.07 oz. gold, which explains the sell-off that occurred after the results were released. On the morning of Oct. 2, Springer tumbled 64 cents to reach 79 cents, while Cove lost 23 cents to 34 cents.

But Granges and the juniors intend to continue work on the property for as long as possible this year. The camp will be partially winterized in order to allow for an expanded work program that will involve an additional 10,000 ft. of drilling.

At presstime, the resource index was down marginally at 521.26, while the composite index lost 4.41 points at 568.02. Golden Ring Resources, a Prime Equities company which recently took on a copper-gold project in Jamaica, lost a dime to settle at $1.

Outside of the Unuk River project fanfare, trading activity in other issues was generally quiet over our report period. Arrowhead Resources, which is not involved in mining, was one of the more active issues, up a nickel to 52 cents.

Tropicana Development, a junior managed by former Granges president Mike Muzylowski, gained 11 cents to 31 cents after announcing a drill program for its Roadrunner gold project in Arizona. The company said eight holes will be drilled below the workings of three former mines. Two holes will then test the intervening area between the structures to see if they are part of the same system.

Taseko Mines was relatively quiet this week, losing 50 cents to settle at $7.62. The company’s key asset is the Fish Lake copper-gold deposit north of Lillooet, B.C. Company management, led by the successful team of Bob Dickinson and Bob Hunter, is seeking to vend the deposit to an interested buyer.

Eurus Resource, a Prime Equities group company, moved up four cents to 60 cents this week. The company is involved in a number of projects in northwestern British Columbia, including the Rock & Roll massive sulphide prospect in the Iskut River region.

The new management team at Hemlo Gold Mines was in Vancouver this week to explain the company’s reorganization within the Noranda organization. Hemlo has a stake in the Brewery Creek gold project in the Yukon, with Loki Gold holding the remaining 49% interest. It appears that the partners plan more exploration for next spring to get a better idea of the project’s reserve potential. Loki is holding firm at 70 cents, up one cent from last week.