2010: The year of the deal

After surviving a devastating 2009 characterized by plummeting commodity prices, sweeping cutbacks and ailing financial markets, the mining industry enjoyed a cautious recovery in 2010, powered by higher metals prices and strong mineral demand in Asia. The following is our list of the top mining stories of the year in Canada:

• Mergers and acquisitions – On the heels of a tepid 2009, M&A activity happened at a torrid pace throughout 2010.

Goldcorp stood out as particularly active as it outbid Fresnillo and Newmont Mining to buy Canplats Resources’ project in Mexico for $317 million, and then outmanoeuvred Barrick Gold to buy Xstrata’s 70% stake in the El Morro copper-gold project in Chile for about US$500 million. Later, Goldcorp sold its San Dimas and Escobal projects to Primero Mining and Tahoe Resources, respectively, for a collective US$1 billion, only to turn around and bid $3.6 billion for Andean Resources.

Other juniors that got snapped up in 2010 or are now targets include: Corriente Resources, Brett Resources, Comaplex Minerals, Terrane Metals, Continental Minerals, Baffinland Iron Mines, Spider Resources, Farallon Mining, Ventana Gold and Potash One.

Larger scale deals included: ARMZ taking control of Uranium One for US$610 million; Franco-Nevada buying Gold Wheaton Gold for $830 million; First Quantum Minerals buying the mothballed Ravensthorpe nickel mine from BHP Billiton for US$340 million; Cameco selling off its stake in Centerra Gold for $872 million; Barrick Gold spinning off its African assets into African Barrick Gold, which brought in US$834 million; and Quadra Mining and FNX Mining merging in a $1.6-billion deal.

The mega-mergers were few this year, with notables including Kinross Gold merging with Red Back Mining, Caterpillar buying Bucyrus International for US$7.6 billion, and Western Coal and Walter Energy unveiling a $3.3-billion merger.

• New Yukon gold rush – Kicked off thanks to years of diligent work by Yukon prospectors and our new Mining Persons of the Year, Shawn Ryan and Cathy Wood, the new Yukon gold rush is now in full swing. While Kinross bought leading Yukon explorer Underworld Resources and its White Gold deposit in March for $138 million, that was only the start of the excitement, with compelling new gold results coming from Kaminak Gold’s Coffee project and Atac Resources’ Rau project.

• BHP’s failed bid for PotashCorp – BHP quietly started 2010 with a $341-million purchase of Athabasca Potash and its Burr potash project in Saskatchewan, which is beside BHP’s Jansen potash project.

But things heated up in August, when BHP launched its US$39-billion hostile bid for Potash Corp. of Saskatchewan. It unleashed a wave of opposition in Saskatchewan, which ultimately swayed the federal government to go against its free-market impulses and quash the offer.

• REE and lithium fever – They are tiny and complex pieces of the mining world, but 2010 was the year for rare earth elements (REE) and lithium to shine, as demand continued to rise for these metals in high-tech applications.
Retail investors who did their homework and got in on the ground floor were able to make some stellar stock gains, such as riding Quest Rare Minerals from 5¢ to its present $4.62.

• Uranium rebound – After the spectacular boom and blow-out a couple of years ago, the uranium market regained its strength though the year. Uranium prices started the year around US$40 per lb. U3O8 and finished it around US$60 per lb.
There was also some remarkable uranium exploration successes in the Athabasca basin from Hathor Exploration and Fission Energy at Roughrider and Roughrider East; Denison Mines at Phoenix, and Cameco at Millennium.

• Canadian diamond successes – Canada’s beleaguered diamond explorers were also on the mend this year, with three highlights: Peregrine Diamonds and BHP Billiton scored major successes with work at their Chidliak diamond project on Baffin Island; Stornoway Diamond and Soquem transformed their Renard diamond project in Quebec’s Otish Mountains into a potential mine with a substantial resource base; and Mountain Province Mining and De Beers tabled a positive feasibility study for their Gaucho Kue project.

• Chilean miner rescue – The amazing story of 33 miners rescued from deep within the San Jose copper-gold mine near Copiapo, Chile, captured the hearts of perhaps a billion people around the world who tuned in to watch the unfolding drama. It was also a big lift for Chileans still reeling from the February earthquake south of Santiago that killed more that 700 people.