by Stockwatch Business Reporter
New York spot gold fell $5.10 Friday, closing at $1,801.80. The TSX Venture Exchange lost 7.4 points to 902.56 while the TSX gold index slipped 2.00 points to 293.50. Most Canadian gold miners moved lower today. One exception was Ero Copper Corp. (ERO), a miner of gold and copper in Brazil, which added 11 cents to $23.95 on 200,000 shares. Franco-Nevada Corp. (FNV), nearly $194 barely a week ago, helped lead today's decline, losing $3.19 to $184.85 on 763,000 shares.
Newmont Corp. (NGT), an $80 stock a week ago, lost another 10 cents to $75.57 on 526,000 shares on its sixth consecutive day of lower closes. The company reported a $661-million (U.S.) second quarter profit earlier this week. Newmont averaged over $1,820 (U.S.) per ounce for the 1.45 million attributable ounces of gold it produced in the quarter, and its all-in sustaining costs dropped slightly, to $1,035 (U.S.) per ounce. Nevertheless, Newmont also warned investors that costs for materials, energy and labour -- the costs of mining in other words -- are rising significantly.
George Drazenovic's St. James Gold Corp. (LORD) ended the day down 81 cents to $4.10 on 50,000 shares. The slide followed word that the company "has mobilized its geological and geophysical field team to pursue prospecting on its Quinn Lake property," near Valentine Lake in Newfoundland. Word that some rock hounds are on their way to the property failed to impress investors who helped bid the company's stock to $6.50 in March, and to $5.60 just last week.
The March rally followed word that the company was acquiring gold prospects, including Quinn Lake, in Newfoundland, while the July enthusiasm was the result of the company's plan for a 13,000-metre drill program at Florin, in Yukon. Indeed, the bloom came off the July rose with word earlier this week that St. James has begun exploration at Grub Line, just eight kilometres east of the bonanza-grade Keats zone discovery being worked by New Found Gold Corp. (NFG: $10.02).
Today, Mr. Drazenovic, St. James Gold's chief executive officer, pointed to the recent discoveries at Keats and at the Valentine Lake project, where Marathon Gold Corp. (MOZ: $3.05) has defined a multimillion-ounce deposit, as support for his early-stage gold hunts. "We are excited to provide our shareholders exposure to the emerging gold rush," he gushed, although those shareholders apparently do not share his enthusiasm.
Both Grub Line and Quinn Lake are grassroots projects where a promoter has only rival data or geological jargon to support his pitch. Indeed, Mr. Drazenovic offers both, pointing to the nearly five million ounces of gold at Valentine Lake while cheering the "critical igneous trondhjemite" contact with the Rogerson Lake conglomerate as a reason to be enthused for St. James's Newfoundland prospects.
At Florin, where camp construction is under way ahead of a 13,000-metre drill program, Mr. Drazenovic has more grist to grind. The project hosts a 171-million-tonne inferred resource averaging 0.45 gram of gold per tonne, about 2.5 million ounces, and the company recently raised $5-million to further delineate the big resource, a program that Mr. Drazenovic calls "one of the most extensive exploration campaigns ever carried out on the property." Perhaps, but it appears that with all its focuses, the market worries that St. James has no focus at all.
Arnold Kondrat and Peter Cowley's Loncor Gold Inc. (LN) closed unchanged at 67 cents on 81,000 shares on word that it has closed its placement of 7.85 million shares at 70 cents, raising $5.49-million. This is nearly $600,000 more than it had been seeking in what was to be a $4.9-million placement late last month. The cash, says Mr. Kondrat, CEO, and Mr. Cowley, president, is for continued exploration and development at the Imbo project in the Democratic Republic of the Congo.
Loncor's focus at Imbo centres on the Adumbi deposit, where the company has delineated 41.3 million tonnes inferred averaging 2.37 grams of gold per tonne, about 3.15 million ounces, based on a cut-off averaging about 0.7 gram of gold per tonne. That resource is constrained within a hypothetical pit shell, but given the grades, the company is pondering the economics of mining deeper underground as well. Further, Loncor now thinks that the plunge of the deposit may be shallower than initially projected, which could be a "potential positive for resource ounce generation," according to Mr. Kondrat and Mr. Cowley.
As for the plan, it appears more drilling at depth is in the works, targeting that possible underground resource with the aim of adding significant ounces. The work, along with drilling elsewhere at Adumbi, will support a preliminary economic assessment of the Imbo project, expected late this year.