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Canadian Stock
Exchange-
GOLD AND
THE LOONIE -
WILL THEY CONTINUE TO
BE STRONG?
B
Y E.A.
SCHILLER
Summer has come and autumn is here, leaves are
falling but September gold is rising and April/08 future gold was around $750.
With gold trading around $730, gold stocks have risen, accordingly bringing much
joy to aficionados of the precious metal. And the Canadian Loonie now at par
with the US dollar and on the some days higher than the greenback: Is this an
omen for better things forthcoming? Uranium, this year’s bell weather mark is
dropping in price to below $90 and affecting a lot of stocks seeking the
radioactive element. Zinc took at hit for a variety of reasons mainly the US
housing market, copper too came off as did aluminum but the precious guys, gold,
silver, platinum and palladium remained strong. Commercial paper, a term known
to bankers and lending institutions became a household world in August and
indices measuring stock values on world trading floors fell in August like a
lead balloon. Some recovery took place in early September and those with
survival instincts hung on, but those, especially in the US, suffered from
defaults on mortgages and loans.
With exploration field seasons terminating or
about to terminate for northern Canadian projects and with autumn breezes about
to become winter winds there is little joy to report, except for activities of
Stornoway Diamond Corp (SWYTSX-V) and Shear Minerals Ltd (SRM – TSX-V) on
their Churchill diamond project in Nunavut on the west coast of Hudson Bay. The
first phase of processing of the 400 ton bulk sample extracted from the Kahuna
kimberlite dike this year yielded 3,239 diamonds greater than 0.85 carats with a
weight of 93.54 carats from 106.6 dry tons. The three largest diamonds weighed
1.39, 1.19 and 0.73 carats. Preliminary observation describes the majority of
the diamonds as white and colorless with a good population of octahedrons. Both
president’s Eira Thomas and Pamela Strand of Stornoway and Shear,
respectively, are very encouraged and both stated that these preliminary results
indicate the exceptional potential of the Kahuna kimberlite dike. Stock wise SWY
and SRM remained in the 75 and 50 cent range, respectively. Gold fever has taken
over leaving diamond diggers with limited investor interest. North American
explorers operating abroad were shaken by Southwestern Resources (SWG-TSXV)
announcement that gold assays from their Boka project in China were incorrectly
stated and there is no bonanza there as investors had expected. The stock
dropped from $7 to around a dollar and with pending lawsuits being thrown at
senior management. It is hard to believe that a Bre-X look alike could repeat
itself.
For gold, Ontario provided the most encouragement
of better things to come as explorers through out the province reported
significant intersections. Gold mines are found where there are gold mines
and Ontario has been blessed with deposits across its vast Precambrian Shield.
For a quick capsule of enlightening events, read on you gold bugs. In the east,
next to Quebec, Timmin’s explorer Lake Shore Gold Corp (LSGTSX-V) announced
new high-grade gold mineralization on their Thunder Creek property. Hole TC07-30
intersected 3.1 meters (413.4- 416.5 m) of 12.01 g/t adjacent to their
100% Timmins West property where a positive pre-feasibility study was recently
completed. Hole 30 yielded three other gold intersections from 384.8 - 388.45 m
at 10.91 g/t, 408.5-409.0 m at 27.6 g/t, 412.55-416.5 at 9.77 g/t. These four
intersections represent a 31 meter wide zone located 865 meters from the Timmins
West shaft is open above and below the intercept. The stock moved up to $1.95 on
modest moves from around $1.50. Nearby in Kirkland, Queenston Mining Inc (QMI-TSX-V)
had some great intersections to report. As part of their 44,000 meter resource
definition program (yes 44,000 meters - an awesome program) hole UB07-100 cut
10.8 g/t Au over 16.5 m and a couple of other holes cut a half to an ounce per
tonne over short but mineable widths. Moving to the western side of the
province, next to Manitoba and the very famous Red Lake gold camp several
excellent projects are underway highlighted by the following; Golden Eagle Mines
Ltd. (GEA-TSX-V) report that a new gold zone called the Finn has been
intersected in their FN drilling series. The Gold Eagle property is situated
along the Red Lake trend, west of Goldcorp’s Red Lake and Campbell mines and
immediately southwest of Goldcorp’s Cochenour-Willans mine.
A wedge hole cut 4.8 m from 2,501.4- 2,506.2
meters contained 7.97 g/t Au. A wedge hole means from a previously drilled hole
(the master hole) a second hole was drilled from the initial master hole at some
point by wedging. Like a Christmas tree where a branch comes off the trunk (or
master hole) and directed by a wedge. The Finn series of holes was implemented
as a regional reconnaissance exploration program designed to obtain data on the
stratigraphy and geology of the south-eastern area of the Gold Eagle property.
You can think of these holes like placing a needle in a hay stack and coming up
big time. Remember we are down over 2000 meters, well over a mile and
intersecting economic grades of gold mineralization. The Red Lake gold camp is a
very impressive camp and the technology of extracting gold from these deep
levels is at a world class level.
So who is next on the hit parade at Red Lake? The
star has to be Goldcorp Inc (G-TSX and GG-NYSE) and the company is the principle
player here. In previous years the Campbell Mine was king of the castle at Red
Lake and owner Placer Dome sold it to Barrick Gold who in turn sold it to
Goldcorp. A lot of personalities came and departed with the transition but
at the end of the day Goldcorp is pouring the bricks at the famous Campbell mine
at Balmertown (a suburb of Red Lake). The company is pursuing several deep
targets (all of the shallow targets have been mined out) and is optimistic that
deep deposits will be delineated with current drilling programs. The stock
trades in the high twenties up from the lower twenties in previous weeks and is
recommended by several brokerage houses. The company has exposure to wide range
of gold projects in North America and worldwide ranging from Argentina to
Mexico.
A New Voisey’s Bay Discovery
Some interesting results were received from
northern Labrador, 85 kms northwest of the Inco-CVRD Voisey’s Bay producing
nickel/copper/cobalt mine. Once famous during the nineties when Diamond Fields
made that famous discovery at Voisey’s Bay there appears to be a new Voisey’s
Bay look-alike in the making. Celtic Minerals Ltd (CME-TSX-V) has discovered
nickel-copper-cobalt-palladium massive sulphides coincident with a prominent
gravity anomaly on their Kingurukik property. Initial surface samples yielded up
to 1.09% Ni, 0.59% Cu, 0.17% Co and 0.433 g/t Pd. The samples are found in an
olivine rich ultramafic rock unit showing similarities to Voisey’s Bay.
Further sampling has been completed in addition to a detailed UTEM geophysical
ground survey. Two drills are in operation testing the showings and geophysical
anomalies. A third drill is scheduled to be positioned on the property this
fall. The company announced a recent $6 million financing to fund this
aggressive exploration program. CME stock has risen from the 40 cent range in
August to around $1.20 in early October.
Elsewhere in northern Ontario platinum/palladium
pursuer Northern Shield Resources Inc (NRN-TSX-V) saw their stock rise for
unknown reasons from around 50 cents to almost a dollar in early October. They
are awaiting assay results from their Highbank drill project where a lot of
encouraging surface geochemistry sampling indicated Pd/Pt in favourable
ultramafic rocks drill tested. Near by Noront Resources Ltd. (NOT-TSXV)
announced some high grade values in drill holes on their Double Eagle project in
the St. James Bay Lowlands, northeast Ontario. One of the discovery holes
contained 68.3 meters of 5.9% Ni, 3.1% Cu, 2.87 Pt, 9.78 Pd, 0.61 Au and 8.5 g/t
Ag. NOT traded well above 4 dollars then settled in just below 4 dollars.
Northern Shield jumped into the staking spree as did others including Freewest
Resources Canada Ltd. (FWR-VSEV).
These results just show you that the science of
geological thinking and the application of modern geophysical methods can find
major deposits in terrain with almost no outcrop. As mentioned above, Ontario is
elephant country and when all the tools available to today’s geologists are
employed these kinds of discoveries are made possible. This story resembles the
famous discovery of Kidd Creek near Timmons many moons ago based on a
geophysical survey in unknown terrain. Is this a new mining camp in the making,
at this stage hard to say, but it sure has a shot of becoming one.
Ed Schiller is a consulting geologist.
He can be reached at
Box 28048
R.P.O., E. Kelowna, B.C.
Canada V1W 4A6.
Or via email at:
eschille@shaw.ca.
Mr. Schiller writes for several national and
international business and resource magazines. Opinions expressed are those of
Mr. Schiller and do not necessarily reflect those of the management of the
Miners News.
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