Friendly mini-mergers and not so friendly property decisions highlighted the Canadian mining markets this past week. Through it all September was once again a stellar month for junior resource stocks with the TSX Ventures Exchange ending at a new all time high, up almost 4% on the week.
Having been thwarted in an earlier attempt to take over Iamgold, Golden Star Resources set its sights a little lower and announced the take over of St. Jude Resources. The $118 million all share deal has St. Jude shareholders getting 0.72 of a Golden Star share for every St. Jude share. At stake is St Jude’s Hwini-Butre and Benso gold projects in Ghana, which host attributable measured and indicated resources of 15.1 million tones grading 2.71 grams gold per tonne, in Ghana. The friendly deal is expected to close by mid-December. Golden Star closed down on the news losing C$0.35 on the week to C$3.85, while St Jude ended the week up C$0.30 to C$2.65.
For its part, Wolfden Resources acquired Sabina Resources 60% interest in the Follansbee Red Lake gold property. Drilling on both Wolfden’s adjacent wholly-owned Bonanza property and the Follansbee joint venture property has yielded a number of very promising high grade zones. The price tag to Wolfden is $2 million and 4 million shares. Sabina ended the week down C$0.03 to C$0.68, while Wolfden added C$0.03 to close at C$2.25.
Placer Dome finally came out and stated that the Cerro Casale copper-gold project in Chile is not financially viable at this time and is not financeable. Partners Bema Gold and Arizona Star vehemently deny this fact and Bema intends to utilize all legal avenues with a view to reclaiming Placer’s interest in the project. Bema ended the week down C$0.18 at C$3.12, Arizona Star lost C$0.18 to C$4.60.
Placer did however give the nod to its Pueblo Viejo project in the Dominican Republic. The operation is expected to produce on the order of 12 million ounces of gold at cash costs of around $210 per ounce over 20 years. Capital costs ring in at a staggering $1 billion. In the initial six years of the mine’s operation, Pueblo Viejo is expected to produce 800,000 ounces of gold per year. Placer ended the week down C$0.04 at C$19.89.
Speaking of advanced projects facing turmoil, Crystallex International continued to be under sell pressure after last week’s news that Venezuelan President Hugo Chavez stated that a new state-owned company would build a mine in Las Cristinas, which Crystallex is trying to advance. In the end Crystellex ends up with the notoriety of being one of the big board’s worse performer stock of the third quarter. Crystellex shares down another C$0.13 during the week to C$1.83.
Shareholders of Anatolia Minerals Development had a good week after the company reported an updated resource estimate for its wholly-owned Copler gold deposit in Turkey. The study by Independent Mining Consultants (IMC), of Tucson, Arizona, pegged the measured and indicated in-pit oxide resources at 11.6 million tonnes grading 2.96 grams gold per tonne gold, plus 30.9 million tonnes heap-leach at 0.70 grams gold per tonne for a total of 1.8 million ozs. Not bad and 75% of it is in the measured camp. Anatolia ended the week at C$2.14, up C$0.30.
Investors love affair with high-grade uranium samples continued as shares of Solex Resources and Frontier Pacific Mining soared on chip sample results from the Macusani uranium project in Peru. Results averaged well above 1% U308 but still they are just surface samples of veins/fractures and fillings. The market did not care, driving Solex up by C$0.20 to C$0.37, while Frontier closed at C$0.30, up C$0.08.
Canada’s largest gold miner, Barrick Gold ended the week at C$33.70, down 0.06, while Goldcorp tacked on C$0.36 to close at C$23.30.
Gold continues to trade near 17-year highs but many of the gold stocks appear to be taking a rest after such a strong move the past two weeks. A break above the $475 per ounce mark may well propel new buying in the sector but only time will tell so stay tuned.