Diamonds & Specialty Minerals Summary for Sept. 13, 2013

2013-09-13 19:01 ET - Market Summary

by Will Purcell

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Adriaan Bakker's PacificOre Mining Corp. (PC), up one-half cent to six cents on 178,000 shares, wants to sell 12 million five-cent shares. Mr. Bakker, who became CEO in August by wresting control from Pat O'Brien and Christian Derosier, says the $600,000 will be primarily used for working capital. That could mean most anything, but presumably some will go to exploring PacificOre's Lac Dore vanadium project in Northern Quebec, since Mr. Bakker spent spring and summer grousing about the old guard wasting much of the company's cash on administrative matters and insider perqs. Lac Dore has seen a bit of work, some study and a lot of promotion over the years. An 11-year-old "feasibility study" by a former owner touted the play with 100 million tonnes of rock averaging 0.5 per cent vanadium oxide, 17.4 per cent ilmenite and 35 per cent magnetite; enough to support a $370-million mine plan. Under new rules all PacificOre can say is that the study was "preliminary in nature" -- or in other words, unreliable.

Richard Nemis's Bold Ventures Inc. (BOL: $0.06) used that phrase this week to disparage a resource estimate for the Black Horse chromite project in Northern Ontario that Frank Smeenk's KWG Resources Inc. (KWG: $0.055) issued this week. KWG, which can earn an 80-per-cent interest by paying the bills on the Bold owned and operated property, said Black Horse contained an inferred resource of 46.5 million tonnes averaging 38.8 per cent chromium oxide. (Days earlier the estimate was 43.8 million tonnes at 37.5 per cent, but that was an error resulting from "clerical misadventure." Apparently somebody forgot to include results of a 2008 drill hole.) A day later Mr. Nemis said Bold had nothing to do with the KWG estimates, adding the company considered the study "preliminary in nature" and believed additional work should be carried out. Bold's caveat is curious since KWG was even more cautious when discussing its numbers. There is poor confidence in lateral continuity, KWG noted, adding that higher-grade zones were poorly defined by sparse drilling. As a result it said additional drilling, both infill and expansion, is needed to expand the resource and provide better continuity.