Editorial: Good news coming for Crystallex?

We’ve almost become accustomed to earth-shaking news in the mining sector popping up on our monitors every few days, so the busy but unspectacular week ended June 16, the twenty-fourth trading week of 2007, was a bit of an early summer breather.

* It’s been said that the stock chart of Crystallex International is a pretty good indication of Venezuelan President Hugo Chavez’s brain chemistry on any given day. Well, all vital signs were positive this past week as Crystallex announced that it was close to receiving its environmental permit from the famously erratic Venezuelan government — the last big hurdle before the company can at long last start construction at its massive Las Cristinas gold project in Venezuela’s Kilometre 88 district. The stock rose more than 10% in response.

After so much bluster and false hope, this time it looks like the real thing, and with Gold Reserve’s lead engineering contractor SNC-Lavalin already mobilizing to the neighbouring Brisas development site, the district looks to soon become a huge construction site, potentially with two major gold mines in production before the decade is out.

* The week saw announcements of two more friendly takeover bids for mid-tier explorers: On June 11, Beijing-based Aluminum Corp. of China (“Chinalco”) unveiled a $6.60 cash offer for David Lowell’s Peru Copper and its large but low-grade Toromocho copper deposit in Peru, valuing the junior at $840 million; four days later, French government-owned uranium giant Areva tabled a $8.28-per-share bid for South African uranium explorer UraMin, pegging the latter’s value at US$2.5 billion.

* Among the junior explorers, the week’s star performer was Toronto-based Sage Gold, which reported its best-ever nickel intercept at the Jacobus copper-nickel property near Beardmore, Ont. The first hole of a 6-hole program returned a true thickness of 8.5 metres grading 0.95% nickel and 1.16% copper, and more assay results are pending. The news pushed the stock up by around 60%.

* A prophetic report appeared on www.polishedprices.com that Jonathan Oppenheimer, the son of De Beers’ chairman Nicky Oppenheimer, is leaving South Africa for England. This would break the family’s tradition of being strongly committed to South Africa, where the Oppenheimer family’s vast fortune was first secured in the 1920s by Jonathan’s great-grandfather Ernest Oppenheimer.

The family owns 40% of privately held De Beers, and charges the company a US$15-million management fee annually. The contract expires next year, however, and there’s plenty of speculation De Beers’ 55% owner, Anglo American, won’t renew it in its present form, and the family’s long dominance of the global diamond business will weaken in the years ahead.

* It’s hard to tell, but anti-mining sentiment seems to have reached into China. The Associated Press, quoting the Xinhua News Agency, reported that Tibetan officials plan to ban the mining of gold, mercury, arsenic and peat to preserve mineral resources and protect the environment, since the Qinghai-Tibetan plateau serves a watershed for the Yangtze River. It doesn’t look like Continental Minerals shareholders need worry, though, as its Xietongmen project is copper heavy, and has the strong backing of the central government.

* After many, many years of study, Canada’s federal government made a decisive step in dealing with our country’s nuclear waste by accepting the Nuclear Waste Management Organization’s recommended “adaptive phased management” option, which involves the isolation and containment of used nuclear fuel deep in the earth, with an option for temporary shallow underground storage.

The government will now set about deciding the best way to pick a spot for a nuclear waste repository, which presumably would be a hundreds of metres inside a large, relatively unfractured granitic batholith situated somewhere in Ontario, which is Canada’s biggest producer of nuclear waste. It may yet be a decade away, but there are bound to be substantial contracts for miners and suppliers in all this. Industry has already contributed over a billion dollars to a fund that will be directed to nuclear waste disposal. Expect, too, plenty of the usual squawking against the idea from the nation’s ecochondriacs.


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