Flood of share buybacks issued by mining companies

The collapse of the stock markets, which has erased billions of dollars of value and decimated investor confidence, is also being seen as a buying opportunity — by none other than the companies themselves.

Following the Oct 19 crash, a spate of normal course issuer bids have been filed by tse-listed resource companies. The bids followed quickly on the heels of a $1-billion(US) buyback program announced in New York by the granddaddy of U.S. capitalism, ibm Corp.

In all cases, the companies are saying that at currently depressed prices, the use of cash from treasury to purchase their own shares is deemed a prudent use of financial resources.

A partial list of several Canadian mining companies buying back shares is listed below.

* Kerr Addison Mines — The company plans to purchase up to 850,000 of its common shares or 4.9% of the outstanding 17.41 million issued. Purchases are expected to begin on Oct 29.

* MSR Exploration — Plans to purchase up to 600,000 shares for a maximum expenditure of $1.5 million, whichever occurs first.

* Belmoral Mines — Plans to buy a maximum of 1.8 million shares or approximately 5% of its total outstanding issue of 37.77 million shares. The program will begin on Oct 29.

* Royex Gold Mining — Royex plans to purchase shares of Lacana Mining Corp. up to a maximum of 1.23 million. Royex currently owns a 43.7% interest in Lacana which in turn controls Mascot Gold Mines in B.C. Royex will increase its stake in Lacana to more than 50%.

* Lacana Mining Corp. — Another company in the Royex fold, Lacana plans to buy up to 1.2 million of its shares or 5% of its outstanding capital. The program begins on Oct 26.

* Mascot Gold Mines — Plans to purchase up to one million of its common shares or 5% of its outstanding issued shares.

* Galveston Resources — Another company intimately associated with the Royex Group, Galveston intends to purchase up to 1.2 million of its shares or 5% of the outstanding capital.

* Agassiz Resources — Proposes to buy up to 323,421 of its common shares on the tse.