Gold Summary - 26th

Gold Summary for March 26, 2014

2014-03-26 20:59 ET - Market Summary

by Stockwatch Business Reporter

New York spot gold closed down $5.90 to $1,305.80 Wednesday, dropping to a six-month low as the United States economy continued to improve. The U.S. Census Bureau says mining was the fastest growing sector in the economy between 2007 and 2012. During this time, the number of businesses engaged in mining rose by 26 per cent, to 20,000 from 16,000. Revenue also climbed, to $222-billion from $158-million, and so did the number of peopled employed, to 712,000 from 579,000. Returning to Canada, the TSX Venture Exchange dropped 15.02 points to 1,003.25 and the TSX Gold Index dropped 8.47 points to 181.65.

Canada's major gold miners ended the day down. Barrick Gold Corp. (ABX) fell 87 cents to $19.80, Goldcorp Inc. (G) fell $1.32 to $27.18, Eldorado Gold Corp. (ELD) lost 27 cents to $6.38 and Agnico Eagle Mines Ltd. (AEM) dropped $1.35 to $33.34.

Alan Coutts's Noront Resources Ltd. (NOT) slipped one-half cent to 39.5 cents on 71,000 shares. The company, which is working on obtaining environmental approval for its Eagle's Nest project in Northern Ontario, spent the day applauding the province and nine Northern Indian bands. After eight months of rigorous discussion, the government and the Indians have agreed upon a "framework" for developing Canada's Ring of Fire. They signed the deal today at a ceremony that included a drum circle. The remote Indian bands, which were prone to blockades until companies started showing up with gifts at Christmas, have now decided to support Northern development. In return, they want access to gridline transmission and a transportation corridor (road or train), as well as plenty of community spending. Revenue sharing has yet to be discussed; that will probably take much longer than eight months. In any event, Natural Resources Minister Michael Gravelle seemed pleased. He said this framework is key to many other decisions. He will be speaking at a business luncheon in Sudbury tomorrow.

Mr. Coutts has been president of Noront since Oct. 1. He was previously head of Xstrata Nickel's Australasia division based in Perth. There, he says he spent plenty of time working with local aboriginees, many of whom were employed at the company's three Australian mines. At least they were. Shortly after Glencore merged with Xstrata last May, it decided to close or downsize several Xstrata Australian mines, including Cosmos, Collinsville and Ravenhurst.

Lori McClenahan's St. Elias Mines Ltd. (SLI: $0.025) has some bad news: its Tesoro project in Peru is uneconomic. Geologist and independent director Robert Krause spent the past eight months working on a Tesoro technical report. He says the project faces logistical hurdles, high capital costs and is much too far from a water source, but its biggest problem is narrow veins. St. Elias seemed to think it had a monster deposit on its hands in 2010 based on a pleasing 3-D model from a Titan-24 geophysical survey. Ms. McClenahan was so thrilled with those results that she treated them to an $800,000 world tour. She and her surveys made stops in New York, Paris, Brussels, Geneva, Zurich, Milan, Shenzhen, Beijing and Israels. She would have happily promoted assays as well as surveys, but St. Elias had no assays. It first applied for Tesoro drill permits in 2004, and was still waiting as she travelled. Finally, in May, 2011, it received approval to drill. The excitement over a first-ever drill program helped the stock to a high of $2.70 in late 2011, up from 30 cents a year earlier. In early 2012, however, the first St. Elias assays returned, sending the stock crashing down to 60 cents. The best result was a disappointing 0.74 metre of 23.5 parts per million gold. Further drilling returned and St. Elias has yet to find the gold deposit indicated by its magnificent geophysical surveys. It was still looking last May, when it asked director Krause to prepare his report. St. Elias had been hoping for a better result, but says it accepts the interpretation and plans to -- what else -- "move forward." It could still look into medical marijuana, and apparently the licences come faster.

Ms. McClenahan has another company, Intigold Mines Ltd. (IGD: $0.155), where she is busy promoting apps. Intigold owns a 51-per-cent interest in TTAGIT Social Networks Inc. It started as an on-line tool that allowed its users to comment on websites, but it has since expanded its product line. TTAGIT announced its latest venture last week; it has created an app for peer-to-peer ticket sales. It also has a chat room, Teze, for those interested in on-line flirtation

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