The week ended June 21, the 25th trading week of 2008, was highlighted by a court victory that is broadly encouraging for all juniors actively developing mines in Canada.
• Imperial Metals got its big win in Canada’s Federal Court of Appeal, which struck down an earlier decision by the Federal Court Trial Division. The new decision reconfirmed the federal government’s environmental approval of the company’s proposed Red Chris copper-gold mine in northwestern B. C.
Anti-mining NGO MiningWatch Canada had earlier pushed the Federal Court Trial Division into quashing the federal government’s original approval of Red Chris, which had been sped up and simplified in order to avoid duplicating the comprehensive regulatory efforts by the B. C. government — a new red-tape-cutting federal policy that makes sense, since mining ultimately falls under provincial, not federal, jurisdiction.
Access to electrical power remains a big hurdle for mine development in B. C.’s remote northwest. Now, Imperial can redouble efforts to band together budding power users in the northwest to present a more united front to potential power suppliers and investors.
• The months-long stagnation in juniors’ share prices combined with the substantial cash raised last year that’s still sitting in treasuries seems to be unleashing a new phase of corporate sniping and raiding.
On June 16, Stan Bharti-led Aberdeen International, owner of 9.9% of U3O8 Corp., proposed a new slate of Aberdeen directors that would presumably use U3O8’s $18-million treasury for mergers and acquisitions rather than the currently planned focus on uranium exploration in Guyana. While Bharti is a wily veteran skilled at this kind of gamesmanship, U3O8 already has a strong board that would likely be given the benefit of the doubt by many shareholders.
Meanwhile, Coeur d’Alene, Idaho-based WGI Heavy Minerals is fighting off dissident shareholder Passport Capital and its proposed slate of directors, while the largest shareholder in Genco Resources wants to overthrow three of seven directors in a proxy vote.
• Eldorado Gold’s assertion on June 16 that its bid for Frontier Pacific Mining was its “best and final” one, and would expire on June 17, was pretty much seen by Frontier shareholders for the bluff that it was. By June 20, Eldorado had sweetened its bid and extended it to July 2. Eldorado is now offering 0.1220 of a share and 0.01 in cash for each Frontier share offered, plus a new sweetener of 0.008 of an Eldorado share that would only be handed out if the Greek government gives its environmental approval for Frontier’s Perama Hill gold project, in Greece, within the next year. If successful, the acquisition will give Eldorado a strong presence in southeastern Europe and Turkey.
• Nickel miners in Western Australia absorbed the June 12 news that BHP Billiton is bringing forward a planned furnace rebuild at its 100,000-tonne-per-year Kalgoorlie nickel smelter, owing to a surprising degree of furnace deterioration. The rebuild will take about four months.
The big story with BHP Billiton remains its outstanding blockbuster offer, sweetened in February, of 3.4 shares for each Rio Tinto share. If the bid is successful, it would further consolidate BHP’s status as the world’s biggest and most dominant diversified resources company.
• There was significant turnover at Toronto-based Centerra Gold, which has been a trailblazer in perennially difficult Central Asia. One of the region’s greatest boosters, president and CEO Leonard Homeniuk, is retiring and being replaced by Stephen A. Lang. Chief financial officer David Petroff is also leaving, to be replaced by Jeffrey S. Parr. These changes open the door to strategic moves by the company out of problem-plagued projects and countries.
• A study by National Bank using federal government labour data shows that worker productivity in Canada’s mining and oil-and-gas industries has fallen sharply–roughly 6% — since mid-2006, primarily due to higher wages. National Bank says this fall is counterbalanced by the fact that productivity there was already above average, and this “negative contribution to the business sector’s overall productivity slowdown is not as significant as at first glance.”
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