It was looking a little rocky earlier in the week for investors in junior exploration stocks but a strong showing in gold issues on Friday helped to ease the pain as Canada’s biggest junior exploration bourse, the TSX Venture Exchange, ended the week with just over a 0.6% loss.
On Canada’s big board it was all about earnings with Teck Cominco leading the pack as the world’s largest zinc producer took advantage of its exposure to copper, gold and coal to tally $448 million or $2.06 a diluted share of profit in the first quarter of 2006. Riding high on metal prices, the profit figure is more than double the $205 million or 95 cents per diluted share profit tabled last year. Armed with a steady stream of cash, Teck Cominco also announced that it will more than double its semi-annual dividend to $1 per share from the previous $0.40. The news was not good enough though, as shares in Teck Cominco ended the week at C$77.04 for a C$6.31 drop.
Good earnings were also not enough for Falconbridge. The major tabled a profit of $462 million, or $1.21 per share compared to $176 million or $0.57 per share a year ago. Just as important for shareholders, the company reached a tentative deal with workers at its Raglan mine in Quebec and its Lomas Bayas mine in Chile. Still, shares of Falconbridge lost C$0.18 to close out the week at C$44.50.
A surging gold price helped Alamos Gold moved to a new 52 week high. The company recently started commercial production at its Salamandra gold project in northern Mexico and is developing the 1.7 million ounce Estrella zone, one of eight zones that make up the Mulatos deposit. More than one pundit has suggested that Alamos is on the take out list of some heavy hitters. Most often mentioned is Newmont Mining. Alamos closed out the week at C$10.55, up C$1.36.
Meanwhile the Mount Milligan copper-gold porphyry deposit in British Columbia is now back in play thanks to a deal by Atlas Cromwell to acquire the deposit from new owner Goldcorp. Atlas picked up Milligan along with interests in four other projects previously held by Placer Dome in return for 240 million convertible preferred shares priced at C$0.50. Goldcorp acquired these assets as part of its deal with Barrick Gold, which took control of Placer Dome through a successful $10.4-billion take out. Atlas, which plans to change its name to Terrane Metals, added C$0.98 on the week to close at C$1.48.
Ivanhoe Mines decided to spin off its coal assets by selling them to Asia Gold for 82.5 million shares. That gives the Robert Friedland-led company an 88.8% equity stake in Asia Gold. The main asset is the Sukhait deposit that hosts a measured and indicated coal resource of 123.9 million tonnes. Ivanhoe ended the week down C$0.19 to C$10.90, while Asia Gold jumped C$0.65 to close at C$2.65.
Cumberland Resources gave investors a scare on news that regulatory and logistical constraints could delay development of its Meadowbank gold project in Nunavut by up to a year. The company reported that the Nunavut Impact Review Board has asked for further information regarding the company’s planned road access to the project, certain socio-economic impacts, and questions that have arisen after consultation with nearby residents. Meadowbank, which has been hit by higher capital costs, hosts proven and probable (diluted) reserves of 21.32 million tones grading 4.2 grams gold per tonne. Cumberland lost C$0.35 to close at C$4.21.
Shore Gold and De Beers Canada may not have kissed and made up but at least they tabled a $43.2 million exploration program for their Fort à la Corne joint-venture project in Saskatchewan. The budget approval comes after The Court of Queen’s Bench for Saskatchewan dismissed De Beers’ petition to have a voting agreement between the other partners, Shore Gold/Cameco/UEM voided. De Beers is appealing the ruling with a hearing set for May 18. Shore Gold ended the week at C$7.67 for a C$0.30 gain.
Canada biggest gold miners continued to move in opposite directions as shares in Barrick Gold lost C$0.30 to close at C$34 even, while Goldcorp moved to another new 52-week high of C$39.25, up C$1.77. Taking the middle ground was Kinross Gold, which closed out the week up C$0.60 at C$13.65.
Moving away from the Canadian markets, Barclays Global Investors International’s widely anticipated iShares Silver Trust got underway on the American Stock Exchange. Shares in the exchange-traded fund (ETF) started trading at US$128.64, rising to $138.12 by the close. Each share represents 10 oz. of silver as the 150,000 shares are backed by 1.5 million oz. of physical metal recently deposited with JPMorgan Chase Bank in London. Barclays plans to continually issue additional iShares in batches of 50,000.
The resource market seems to be pivoting at a crucial level. The bulls are all saying it is different this time, while the bears have heard that phrase one too many times in the past. Will this week be the deciding period? Only time will tell… so stay tuned.