Placer’s Cristinas deal stirs up controversy

Although trading volumes were low during the holiday-shortened report period of Aug. 1-7, there were nonetheless several developments in the Canadian mining scene.

Reuters reported that Venezuelan state-owned Corporacion Venezolana de Guayana (CVG) is rejecting Placer Dome‘s sale of its 70% stake in the Las Cristinas gold project to CDNX-listed Vannessa Ventures, quoting CVG President Francisco Rangel as saying Placer had not sought CVG’s written approval, which was essential for the sale. Placer responded that it did not need CVG’s approval. The Canadian major gained 15 to reach $15.50.

At the Niobec niobium mine in Quebec, hourly workers represented by the United Steelworkers of America began striking in early August, following the expiry of a collective agreement in April. Mine owners Cambior and Mazarin say they consider their “final offer,” which was rejected by the workers, to have been “generous considering the actual economic context.” Cambior also announced that its Japanese white knight, Jipangu, would swap US$3.7 million in debt for 6.5 million Cambior shares priced at US57 per share. Following the issue, Jipangu will hold a 27% interest in Cambior. Cambior closed down 17 to 55 while Mazarin was off a penny at 50.

Among the remaining gold majors, Barrick Gold rose 4 to $22.74, Franco-Nevada Mining slipped 6 to $19.89, Kinross Gold was up a penny to $1.21, and TVX Gold declined another 4 to 65.

Iamgold eased back 3 to $2.78 as it released 6-month financials showing a drop in earnings due to lower production at the partly owned Sadiola Hill mine in Mali, as well as lower realized prices.

Also active in Mali, Nevsun Resources rose 3 to 28 as it completed an infill drill program at the Tabakoto gold project. A resource update is already under way and will be incorporated into a feasibility study, to be managed by South Africa’s Metallurgical Design and Management. Tabakoto’s open-pit resources were last pegged at 1 million tonnes grading 6.7 grams gold per tonne.

Rising 14 to $5.14, Pan American Silver announced it had acquired from Peruvian zinc-miner Volcan Compania Minera the remaining 27% interest it did not already own in the Huaron silver-zinc mine in Peru, plus $200,000 in cash, $500,000 in Volcan shares and other benefits. In return, Pan American will sell to Volcan 48 ha of Huaron land adjacent to Volcan’s mining operations, plus two parcels of distal Huaron exploration property. Pan American will record a gain of about US$2.5 million in the third quarter to reflect the sale. Pan American began commercial-scale mining at Huaron in April 2001 and has since pushed the mine to its design capacity of about 50,000 tonnes of mill throughput.

Reflecting a bleak outlook for base metal prices in the near term, shares for most of the copper, zinc and nickel producers retreated: Noranda was off a penny at $15.90; Teck Cominco‘s B shares declined 7 to $11.60; Breakwater Resources declined a painful 8 to 79; Boliden was up 1 to 31; Inco fell 32 to reach $25.42; and Falconbridge retreated 11 to $16.80.

On the positive side, Vancouver-based Corriente Resources announced it was forming a “global exploration alliance” with BHP Billiton, whereby the major will pledge financing support for Corriente’s expanding portfolio of advanced exploration prospects. BHP Billiton describes the deal as “a new model for long-term relationships between junior explorers and senior mining companies.” The first project for the new alliance is the Mumbwa oxide copper-gold property in Zambia. Corriente closed down 3 over the week to $1.17, while BHP Billiton rose US30 to US$10.15 on the New York Stock Exchange.

Robert Friedland’s Ivanhoe Mines jumped 10 to $1.45 as it announced the discovery of more copper and gold at the Turquoise Hill porphyry project in southern Mongolia.


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