mining news|Resource Stock Roundup:Thursday, June 04th, 2009
Jun 4th, 2009 | By Doug Casey | Category: Gold MarketA little pin pricked the Canadian Market bubble during Wednesday trading with a stronger United States dollar putting pressure on commodity prices. For the tale of the tape, the TSX Exchange fell 2.82%, while the TSX Gold Index plunged 3.5% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, dropped 2.96% with the decliners beating out the advancers by a 521 to 325 margin on a robust 218 million shares traded.
Shares of Moto Goldmines gave back some ground after rallying hard on news that Red Back Mining was making a friendly move on the company. Under the deal, each Moto share will be exchanged for 0.45 of a Red Back share. The transaction is valued at around $500 million. Speculation is that a rival bidder, most likely Randgold Resources (NASDAQ:GOLD), will step into the play. Moto dropped C$0.35 to close at C$4.75, while Red Back lost C$0.73 at C$8.92.
It was a busy day at South African-based Gold Fields (NYSE:GFI). First off, Africa’s second- largest miner agreed to sell its 19.9 percent stake in Sino Gold Mining to Eldorado Gold in an all stock deal valued at $282 million.
Eldorado will exchange 48 of its shares for every 100 shares of Sino Gold. That will give Gold Fields 27.8 million shares or a 7 per cent stake in Eldorado. Eldorado closed at C$10.41 for a C$0.57 loss.
Next up, Gold Fields inked a deal to earn up to 70 per cent of the Woodjam North gold-copper property in British Columbia from Cariboo Rose Resources, which holds 40 per cent and Fjordland Exploration, which holds 60 per cent. Under the proposal, Gold Fields can take an initial 51 per cent interest by spending C$7 million and making $350,000 in cash payments over a three year period. Gold Fields can earn another 19 per cent by spending an additional C$12 million over a four year term. Cariboo ended the day up C$0.04 at C$0.135, while Fjordland added C$0.03 to close at C$0.11.
East Asia Minerals added C$0.06 to close at C$0.70 after reporting rock chip samples of up to 125.9 grams gold per tonne over 23 metres at the Miwah project in Indonesia.
Greystar Resources tagged significant, near-surface gold mineralization three kilometres south of its wholly owned, multimillion-ounce Angostura gold-silver deposit in northeastern Colombia. Highlights included 36.7 metres grading 1.1 gram gold per tonne. Greystar ended the day up C$0.09 at C$3.74.
Is it the usual one step back for every two steps forward or was Wednesday sell-off the start of a widely anticipated correction to the nearly three month rally? We shall see what Thursday trading has in store.
Source: Resource Stock Roundup:Thursday, June 04th, 2009
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.