Shrewd Kinross reaps windfall

When it comes to adversity, some people just rise above it all.

• That’s certainly the case with Kinross Gold and its brief but very profitable dabbling in the diamond market in the form of exquisitely timed investments in Harry Winston Diamond and the Diavik diamond mine in the Northwest Territories.

At the onset of the global recession, the rough diamond market virtually dried up, putting Harry Winston in a very vulnerable position as it and partner Rio Tinto were simultaneously looking at suspending mining and raising large sums of cash to finance underground mine expansion.

Flush with cash from its profitable gold mines, Kinross stepped in early last year with purchases of minority interests in both Harry Winston and the Diavik mine for about US$150 million in total.

Of course, the diamond sector bounced back faster than many predicted, thanks mainly to De Beers’ deep production cuts, allowing Kinross this week to announce it is unwinding its various diamond investments for a tidy profit of about US$268 million.

• Looks like there’s still a healthy appetite for new junior gold-silver plays, as shown by the closing of a $300-million offering by Vancouver-based Mala Noche Resources.

Money will be used to close the acquisition of Goldcorp’s San Dimas gold-silver mining complex in the historic San Dimas epithermal mining district located on the border of Mexico’s Durango and Sinaloa states. The three mines Mala Noche is buying produced 113,000 oz. gold and 5.1 million oz. silver last year.

Mala Noche is changing its downer name to a more upbeat “Primero Mining” soon.

• The mineral-rich Sahel desert region of French-speaking West Africa is getting much more dangerous, with the killing of kidnapped 78-year-old French aid worker and retired engineer Michel Germaneau by Al Qaeda in the Islamic Maghreb (AQIM), who number about 400 fighters. The killing followed a French- Mauritanian commando raid in late July on an Al-Qaeda camp in Mali where Germaneau was mistakenly believed to have been held. Germaneau had been kidnapped in Niger in April while helping to build local schools.

The Germaneau killing has outraged the French public and French Prime Minister Francois Fillon announced for the first time, in unusually blunt language for the French, that “France is at war with Al-Qaeda.” The French and U.S. governments are already supporting a joint military headquarters opened in April in southern Algeria by the governments of Algeria, Mauritania, Mali and Niger.

A British ex-pat was beheaded by AQIM in the region last year, and two Spanish nationals kidnapped in Mauritania in November remain unfound.

• The juniors exploring for Arctic gold are providing a lot of the buzz for penny stock enthusiasts in 2010. This week it was North Country Gold’s turn, as its stock popped on the back of long, high-grade gold intercepts at its wholly-owned Three Bluffs gold deposit in Nunavut’s Committee Bay greenstone belt.

The Edmonton-based, John Williamson-led company has been successful in drilling out an extension of a known high-grade hinge zone. Existing indicated and inferred resources at Three Bluffs total 752,000 oz. gold at around 5.9 grams gold per tonne, and these latest results hint there’s more to come.

The junior plans to drill 20,000 metres this year at Three Bluffs using four rigs, and has already discovered a new gold-rich zone named Antler, situated 1.5 km west of Three Bluffs.

• While the gold fever generated by Underworld Resources at its White Gold project in the Yukon was cut short in March by the junior’s $140-million acquisition by Kinross Gold, Kaminak Gold is picking up the slack with enticing early results from its Coffee property in the White Gold district.

This year Kaminak has extended Coffee’s newly discovered Latte gold zone, with hits such as 2.35 grams gold over 51 metres and 1.27 grams gold over 78 metres. Upcoming work is being helped along by a recent $10-million financing.

• Among the junior miners in Canada’s North, a couple of milestones were met.

Consolidated Thompson Iron Mines celebrated the maritime departure from its new port facilities in Sept-les, Que., of its first shipment of iron ore concentrate to its Chinese clients, with product mined from its now fully operational Bloom Lake mine in Quebec.

And North American Tungsten announcing it would reopen the suspended Cantung tungsten mine in the Nahanni region of the Northwest Territories, thanks to a rebound in tungsten prices. The first full month of production will likely be October.