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A look at three junior gold plays that started the week as some of the most actively-traded stocks on the TSX-V.
Given the weakening sentiment in the gold market, we decided to analyze the TSX Venture Exchange (TSXV:OSPVX), the top junior mining exchange (based on listings), to see whether gold juniors are among the movers and shakers. Listed among the 10 most actively-traded stocks on Monday were three companies that technically aren’t pure gold plays, but which nonetheless focus heavily on the yellow metal.
Tres-Or Resources (TSXV:TRS) was the second-most actively-traded stock on the TSX Venture Exchange. In addition to gold, this company has set its sights on other resources, including silver and diamonds. On Monday, Tres-Or’s stock was up half a cent, to $0.03, a 20 percent rise. Over 6.6 million shares were traded that day, with no apparent news catalyst.
Some may wonder why Tres-Or is still considered an explorer. In 2009, its subsidiary, Tres-Or Ghana, signed a profit-sharing agreement with a Ghanian company. Tres-Or Ghana and Warwick Mineral Resources were to provide mining and related services for gold projects in Ghana and planned to split the profits 50/50.
The initial focus was supposed to be a group of concessions referred to as the Agudee project, and Tres-Or Ghana was to provide up to C$650,000 to advance the project to commercial production. Tres-Or said it provided $664,405 and received repayment of $20,500. However, it claims that the net advances were converted to promissory notes by Warwick, which as of February owes its partner $794,700, including interest. Tres-Or has warned shareholders that the repayment of those advances is dependent on the success of the Ghana projects. The company said it will continue to pursue collection of the promissory notes.
The company is currently exploring for gold and base metals in the Abitibi Greenstone Belt in Northwestern Quebec. Tres-Or’s featured projects are the Fontana and Duvay gold properties, which encompass over 6,356 hectares.
In June, Tres-Or announced that an updated agreement with Aurizon Mines (TSX:ARZ,AMEX:AZK) would incorporate the option for Fontana into the existing Duvay option agreement. Aurizon was given the option to earn a 50 percent interest in the properties in return for $2.3 million in cash and $10 million in exploration spending by September 2015. Additional interest can be earned if further requirements are met. Tres-Or said Aurizon has already spent $1.8 million on exploration and has paid $700,000 of the cash requirement.
Share prices remained unchanged on Tuesday, trading at $0.03.
Argonaut Exploration’s (TSXV:AGA) trading volume exceeded 3 million shares, but the stock fell almost 43 percent. The company’s goal is build a portfolio in British Columbia, where it has the Terrace properties and the High Gold molybdenum–copper-gold property. Together, the assets, which are about 35 kilometers apart, provide over 25,000 hectares of mineral-bearing claims.
To further its goal, Argonaut recently entered purchase title agreements for two more historic mines, Lucky Luke and Cordillera, which are adjoining and are in the vicinity of the Terrace claims. These properties reportedly have visible gold with sulfides in quartz-bearing fault zones that have been documented in the historic workings from both Lucky Luke and Cordillera.
They are “at an early phase of exploration and past production is the product of exploration tunnelling in the early 1900s. Conventional industry directed investigation through modern geological, geophysical and diamond drilling methods have never occurred on most of these properties reminiscent of remote third world countries,” said president and CEO Ray Cook in an October 16 news release. He added, “Argonaut has now acquired most of the known documented historic gold occurrences in the Terrace area.”
Earlier this month, the company announced that it intends to complete a private placement of up to 4 million units at $0.05 each for gross proceeds of $200,000. That follows the closure of another private placement in September that returned gross proceeds of over $291,875.
Despite what may seem like positive developments, equity investors have not been supportive of this stock, which is down over 69 percent year to date. It reached a 52-week high of $0.09 in February and has been declining every since. Perhaps better communication would help. The latest mine purchase news is not available on the company’s website, and as we head toward 2013, the company has yet to post a financial report for 2012.
On Tuesday, Argonaut was trading at $0.02.
Santa Fe Metals (TSXV:SFM,OTC Pink:SFMCF) is focused on gold and other metals in Mexico and Canada. Over 1.4 million shares changed hands Monday, allowing the stock to make a $0.02 gain as it announced that it signed a letter of intent with Gold Plata Mining International to purchase the outstanding shares of its subsidiary, La Muriel Mining.
La Muriel has nine mineral concessions, referred to as the Murindo project. The project is located in Colombia and contains a copper-gold-molybdenum system that covers about 160 square kilometers. The subsidiary was granted rights to the property in 2005. Political instability and the challenge of helicopter-only access are cited as reasons for the lack of progress at the site.
Santa Fe and Gold Plata hope to complete a definitive agreement by November 30, 2012. The proposed terms include Santa Fe paying $1.5 million in cash and issuing common shares totaling 30 percent of the outstanding common shares of the company upon closing the transaction.
Santa Fe has also proposed a share consolidation on a 20:1 basis, subject to shareholder approval. On Tuesday, the company announced plans to issue shares priced at $0.025 cents each to settle $243,859 in debt. Subscription receipts for these shares are to be submitted for conversion into common shares only after the planned consolidation, at which time they are expected to be valued at $0.50 each. $80,159 of the debt is payable to CEO and director Ian Smith and $73,700 is owed to Stuart Angus, chairman of the board.
These announcements came amidst the resignation of Jay Sujir, corporate secretary and director, on Monday.
Share prices for Santa Fe closed at $0.03 on Tuesday.
Securities Disclosure: I, Michelle Smith, do not hold equity interest in any of the companies mentioned in this article.