Aur, Cambior active as junior pounces on sickly major

The big story over the Jan. 12-18 report period was the launch by Aur Resources of a hostile takeover bid for Cambior, the Montreal-based gold miner that was crippled last autumn by its own hedging program when gold prices briefly rallied.

Aur, a junior coppper producer, is offering one share for every 1.1 Cambior shares, representing a value of $2.40 per Cambior share, or a premium of 45%, based on the closing prices for Aur and Cambior shares of $2.65 and $1.65, respectively, on Jan. 14.

With a slim roster of potential white knights for Cambior, Aur does not expect it will have to raise its offer. Over the period, Cambior soared 41 to $2.15, while Aur Resources fell 45 to $2.35.

Making up for most of its losses earlier in January, gold surged US$6.50 over the week to US$288.75 per oz. on the London morning fix of Jan. 19. Platinum also bounced back, rising US$20 to US$440 per oz.

Despite the good news for gold, Canada’s major gold producers had a mixed week: Barrick Gold dropped 90 to $25.75; Placer Dome fell 70 to $15.40; Franco-Nevada Mining gained 40 to hit $22.40; Kinross Gold shed 4 to $2.50; and TVX Gold edged up 5 to $1.11.

Goldcorp announced a 17% increase in reserves at its advanced Red Lake gold project in northwestern Ontario. The targeted High Grade zone now hosts 2.3 million contained ounces gold, or 329,000 oz. more than it did a year ago. Nevertheless, Goldcorp closed down 20 to $8.15.

Junior Corner Bay Minerals dropped 30 to $2.45, despite having released more encouraging results from its Alamo Dorado silver-gold project in Mexico’s Sonora state. Drilling will resume shortly on possible downdip and strike extensions to the deposit, which hosts 74.8 million tonnes grading 41 grams silver and 0.16 gram gold per tonne. Metallurgical tests will continue over the course of the year.

Black Hawk Mining jumped 3 to 9 on news that more bonanza-grade silver had been intersected at its jointly owned Manantial Espejo property in southern Argentina. The announcement was accompanied by a one-day frenzy of trading, with more than 2 million shares changing hands. Such volumes were last seen in September 1999, when the junior temporarily jumped to 18.

Whereas nickel and copper prices both showed mild improvements over the week, the major base metal producers showed a broad decline: Inco dropped $4.10 to $30.50; Falconbridge slipped 95 to $25.55; Sherritt International slipped 6 to hit $3.20; Noranda fell 75 to $19.40; Rio Algom fell 50 to $20.75; Teck‘s B shares were off 30 to $14.75; Cominco eased down 20 to $31.30; and Boliden dropped 15 to $4.80.