Editor’s Picks: The Juniors are Keepin’ Busy

It was yet another week of mergers and acquisitions in the mining sector during the week ended Oct. 20, the 42nd trading week of 2007.

* The highlight was the friendly, C$114-million cash offer by Norway’s Wega Mining for Toronto-based gold explorer Goldbelt Resources. Wega must have been lying in wait for months while Goldbelt finished a feasibility study at the Inata project in Burkina Faso and finally sealed a deal with Barrick Gold to acquire its exploration ground in West Africa. At a recent presentation in Toronto, Goldbelt chairman Paul Morgan laughed that it was much easier negotiating with the Burkina Faso government than with Barrick. With so many juniors holding high-quality mineral assets in Burkina Faso, the scene is ripe for consolidation, and we’ll probably see more deals ahead.

* The very busy uranium junior Bayswater Uranium, which has a $30-million exploration budget this year, took time out to make a friendly, all-share offer for Northern Canadian Uranium, valuing the latter at around $21 million.

* As well, Yamana Gold’s hostile-turned-friendly takeover of Meridian Gold came to a conclusion, with 78% of Meridian’s shares being tendered to Yamana at the Oct. 12 deadline.

* For the historically minded, Oct. 19 was the 20th anniversary of Wall Street’s “Black Monday,” when the Dow Jones Industrial Average plunged by 508 points to 1,739, or 22.6%, and stock exchanges around the world saw similar declines in what was the largest 1-day percentage decline in stock market history. To mark the anniversary, jittery U.S. investors bailed out on blue chip stocks, driving down the Dow by 261 points, or 2.7%, and the S&P 500 and NASDAQ composite indices by similar percentages.

* A little history was made this week in the oil market, with crude oil futures hitting an all-time nominal high above US$90 per barrel before pulling back a few dollars. Oil prices were sent skyward by continued weakening of the greenback and renewed clashes along the Turkish-Iraqi border, with Turkey threatening to hit PKK (Kurdish Workers Party) guerillas even harder on the Iraqi side of the border. In its role as the anti-dollar, gold prices had a simultaneous upswing, reaching 28-year highs above US$765 per oz.

* One of the week’s better grassroots exploration drill results came from Vancouver-based Mediterranean Resources (formerly Manhattan Minerals), which cut a shallow 19 metres of 20.08 grams gold per tonne, 5.5% zinc and 0.9% lead at the northeast extension of a 800-metre mineralized trend at its Corak property in northeastern Turkey, well away from the political instability of the country’s southeast and west.

* The next decade will usher in a new era of super-sized nickel laterite mines on tropical islands around the globe. In the wake of announcements of massive investments by CVRD at Goro in New Caledonia and Sherritt International at Ambatovy in Madagascar, Xstrata this week gave the green light to develop the multibillion-dollar Koniambo nickel laterite project in New Caledonia — an asset developed by Canada’s Falconbridge prior to its hostile takeover by Xstrata.

* In the aftermath of last month’s halting of the Kemess North gold project in northern B.C. owing to local aboriginals’ opposition to the use of a lake as a tailings pond, Telus Communications has launched a suit against a small group blocking work on a nearly complete fibre-optic line that would connect Prince George to Vancouver. Telus alleges that its subcontractors were trying to lay a cable along the bottom of the freshwater Anderson Lake, about three hours north of Vancouver, but were prevented from doing so by a group of locals led by Alex Louie of the Okanagan First Nation and Carol Thevarge of the N’Quatqua First Nation. According to Street Wire, the workers were told that the cables would be “harmful to the spiritual environment, namely a serpent and a whale that are said to live in Anderson Lake,” and that light from the cable would blind fish. Prior to the work Telus had all necessary permits and had consulted with 11 local bands, all of who approved the work, which would improve 911 service to the area. Telus won a court injunction against the protesters on Oct. 22, during a hearing in which the protestors said they didn’t consider themselves bound by Canada’s laws.