Sherritt, Ontario Teachers put Fording on notice

Fording, Canada’s largest producer of export coal, took centre-stage in the Oct. 16-22 report period, becoming the latest takeover target of Sherritt International and the Ontario Teacher’s Pension Plan. If successful, the pair will merge the miner’s assets with those of Luscar Coal, which they took over last year.

Sherritt Coal Partnership II, as the suitors are calling themselves this time, is offering $29 for each of Fording’s 51.7 million shares outstanding. However, the Ontario Teacher’s Pension Plan owns 6.2% of those shares, so the pair only needs $1.4 billion for the remainder.

Fording, which rose $8.40 on the news, to $32, immediately called the bid opportunistic and inadequate. It has offered instead to reorganize itself as an income trust so that internal cash flow can be put to better use.

Among the rest of the base metals group, Falconbridge and parent company Noranda were the only ones to have retreated by the end of the period. Falco, which announced a substantial loss in the third quarter, fell 65 to $14.75, while Noranda, which laid off more workers at its CCR refinery in Montreal and head office in Toronto, slipped 20 to $15.

Overall, the TSE’s Diversified Metals and Mining Index finished the period at 122.45 points, or 6% stronger. On the morning of Oct. 23, physical nickel was fixed at US$3.22 per lb., or US17 higher; copper, at US69 per lb., or US3 higher; and zinc, at US35 per lb., or US1 higher.

On that same morning, gold was valued at US$313.40 per oz., or 60 less than it was a week earlier, putting its 4-week loss at US$12.10. Nonetheless, Barrick Gold rose 98 over the report period to finish at $23.45, while Placer Dome climbed 38 to end at $13.68.

Cambior advanced four pennies to $1.29 on news that it had earned US$4 million in the latest quarter — its first profitable 3-month period since October-December 2001. Relatively higher gold prices and production from its Omai mine in Guyana were responsible for the turnaround.

Kinross Gold, which fell 21 to $2.58, has decided to buy out its minority partners in the Kubaka gold mine in far-eastern Russia. The company will pay just over US$45 million for the 45.3% it does not already own.

Meridian Gold released another profitable quarterly report, to which the market responded by pushing its shares up $1.54 to $26.40. The American-based producer raked in US$9 million, nearly US$1 million less than a year earlier.

Junior Pacific North West Capital slipped two pennies to 52 despite having doubled resources at its River Valley palladium project in northwestern Ontario. The next phase of drilling is scheduled to begin shortly, once partner Anglo American Platinum of South African has provided the necessary funds.

Atna Resources, which advanced a penny to 21, watched its funding for the Chanarcillo silver property evaporate. American-listed Apex Silver Mines has withdrawn from the project, because of unfavourable results from the latest drilling.