Gold Summary for Dec. 20, 2011

2011-12-20 15:55 PT - Market Summary

by Stockwatch Business Reporter

New York spot gold rose $21.20 to $1,615.20 Tuesday, rising with the euro on strong debt auctions in Spain (1.74 per cent) and Greece (25.18 per cent). In the United States, the dollar fell and stock markets rose after the Commerce Department reported housing starts jumped in November. Canadian markets also received a boost from the positive American and European news; the TSX Venture Exchange climbed 32 points to 1,440 and the TSX Gold Index rose 10 points to 372.

Gold miners in Canada rose with bullion. Yamana Gold Inc. (YRI) rose 53 cents to $15.12 on 4.06 million shares, Iamgold Corp. (IMG) rose 31 cents to $16.66 on 1.83 million shares and Kinross Gold Corp. (K) added 11 cents to $12.19 on 9.11 million shares.

Charles Page's Queenston Mining Inc. (QMI) added 54 cents to $4.97 on 293,000 shares, after releasing assays, including 18.4 metres of 9.15 grams per tonne gold, from its Upper Beaver property in Kirkland Lake, Ont. Queenston has five properties in Kirkland Lake, all of which it is trying to bring to feasibility. It has $80-million in working capital and eventually hopes to truck ore from all five deposits to one central location. Queenston's stock hit an all-time high of $8 in April, following a buy recommendation from newsletter writer Jim Dines. It then dropped as low as $5.25 in August, when Mr. Dines said sell. Queenston's chairman and co-founder Hugh Harbinson, 63, will retire at the end of this year, leaving his post to fellow director Michael Brown, 67. Mr. Harbinson has been involved with several explorers since the 1970s, includingNoront Resources Ltd. (NOT: $0.80) and Thundermin Resources Inc. (THR: $0.095), where he remains a director.

Hugh Wynne and George Pirie's San Gold Corp. (SGR) jumped 56 cents to $1.94 on seven million shares. The company has drill results, including 11.5 metres of 23.2 grams per tonne gold, from its Rice Lake property in Manitoba. San Gold is drilling 300,000 metres there this year under the direction of Mr. Pirie who is trying to increase resources. He joined the company in December, 2010. In the third quarter of 2011, San Gold reported its first-ever profit: $1-million on revenues of $33-million. It had been mining unprofitably since bringing Rice Lake to production in 2006, mostly because of extremely high cash costs, which peaked at $2,388 an ounce in 2009. This year, Mr. Pirie hopes San Gold will produce 80,000 ounces of gold at a more-reasonable $800 an ounce. For his services this year, he will receive $350,000 in salary and a bonus of up to $525,000. He owns no shares so far, but has options to buy 1.5 million at prices ranging from $1.25 to $3.45.

Lori McClenahan's St. Elias Mines Inc. (SLI) lost four cents to $1.91 on 136,000 shares, as the company talked up potential interest from Chinese financiers. Last week, St. Elias directors Duncan Bain and Murry Bracht, who usually promotes from his Edmonton church basement, travelled to Shenzhen and Beijing with the company's dog-and-pony show. There, they met with "high-ranking officials" to discuss St. Elias's plans for the Tesoro property in Peru, where it is doubling its current 10,000-metre drill program. It began drilling in August, but has yet to receive the first Tesoro assays. Still, the assay-less directors did not travel empty handed to China. They had pleasing geophysical surveys, which Ms. McClenahan hyped on her $800,000 world tour last year. Since returning from China, St. Elias says it has received inquiries from more than two dozen Chinese investment firms and brokerage companies.

Wes Hanson's Noront Resources rose four cents to 80 cents on 239,000 shares. The company has raised $3.5-million for work at its McFauld's Lake project in Northern Ontario's Ring of Fire area. It is also that time of year, when Mr. Hanson dons his Santa Claus suit and travels to the Martin Falls First Nation and Webequie First Nation by plane and then schoolbus to hand out wrapped toys to children under 12. This year, the company estimates it will need about 350 wrapped gifts, and is accepting donations on-line. It raised $35,000 over the past two years, or about $50 a gift. Last year, Santa brought with him two former-NHLves, Todd Harvey and Todd Hlusko, to teach a hockey clinic. As usual, the company filmed a four-minute video called Santa's Sleigh for its website. This year, Santa Wes hopes to continue the tradition with some surprise celebrity helpers.