Merger mania continued with Silvercorp Metals offering up 0.5 of its shares for each Klondex share. The hostile offer is valued and C$70 million and would give the base metal miner exposure to an advanced gold asset in Nevada.
Silvercorp closed down C$0.54 at C$3.82, while Klondex added C$0.58 to C$1.95.

Golden Predator Royalty & Development inked a deal to acquire up to a 70 per cent interest the past producing Brewery Creek project in the Yukon. Golden must spend C$4 million by the end of 2012 to earn a 51 per cent interest. Golden will have the option to acquire an additional 14 per cent interest in the project by spending additional C$1-million and completing a preliminary economic assessment by the end of 2013. An additional 10 per cent can be reached by Golden by completing an additional C$1 million in exploration expenditures and delivering a bankable feasibility study by the end of 2014. Project owner, Alexco Resources (AMEX:AXU) retains a one time right to buy back the additional 10 per cent interest by paying to Golden Predator 2.5 times all exploration and development expenditures incurred by Golden Predator in excess of C$4 million. Golden ended the day unchanged at C$0.44, while Alexco fell C$0.19 to close at C$2.35.

The deal flow is continuing at a torrid pace in the junior end of the equity market spectrum. When will the major step into the fray and take a run at a junior? We shall see what Tuesday trading has in store.

Source: Resource Stock Roundup:Tuesday, June 09th, 2009

Merger mania is going full tilt with the latest marriage proposal being Victoria Gold’s all-share offer for StrataGold. Victoria is offering up 0.1249 of its shares for each StrataGold share held. The move would give Nevada focused Victoria the Dublin Gulch gold deposit in the Yukon. Victoria ended the day up C$0.01 at C$0.39, while StrataGold added C$0.01 at C$0.05.

Rubicon Minerals (AMEX:RBY) cut 173.7 grams gold per tonne over 2.5 metres at its Phoenix gold project in the Red Lake camp of Ontario. Rubicon ended the day up C$0.20 at C$1.73.

Not to be outdone, Colossus Mineral tagged 406.4 grams gold, 98.4 grams platinum and 115 grams palladium over 7.88 metres at its Serra Pelada project in Brazil. Colossus added C$0.78 to close at C$2.38.

Agrium (NYSE:AGU), North America’s third-largest fertilizer producer by market value, posted a fourth quarter profit of $124 million or $0.79 per share, down from the $172 million or $1.24 per share tabled in the same period a year earlier. However over the year Agrium, which ended the day up C$1.20 at C$47.21, posted record profits.

A stock to watch is Kinbauri Gold. The company’s shares were halted from trading at C$0.47 pending news. Kinbauri holds the advanced El Valle/Carles project in northwestern Spain and has been seeking strategic alternatives to move the project towards production.

Right now it is all about gold and nothing else. We will see what Thursday trading has in store.

Source: Resource Stock Roundup: Thursday, February 12th, 2009

Merger mania amongst the junior explorers continued with Avion Resources looking to acquire Dynamite Resources. The proposal calls for Dynamite shareholders to get 0.75 of an Avion share for each Dynamite share. The move would consolidate the Segala mine property, in which Dynamite has a 40 per cent interest. Dynamite closed at C$0.14, up C$0.01, while Avion was unchanged at C$0.20.

Shareholders of Frontera Copper got an early Valentine’s Day present as Invecture Group raised its formal take over offer to C$0.75 from C$0.59 per share. Frontera ended the day up C$0.10 to C$0.78.

Drill results from the Border coal project in Saskatchewan sent shares of Goldsource Mines lower. Out of 18 core holes, five encountered thick intervals of core including a 50.9 metre section. Goldsource ended the day down C$0.57 at C$1.42.

In need of cash, Minera Andes inked a deal with Robert McEwen that would see the founder of Goldcorp (AMEX:UXG) take down 121.2 million shares at C$0.33 per share for a cool C$40 million. Minera ended the day up C$0.12 at C$0.49.

Red Back Mining posted record production in the fourth quarter for its mines in Mauritania and Ghana. Cash operating costs came in at an enviable $393 per ounce for the 72,664 ounces of gold. Despite the good news, Red Back followed the price of gold lower by ended the day down C$0.29 at C$6.81.

Shares of Kinbauri Gold added C$0.03 to close at C$0.42 after the company reported that a scoping study for its El Valle-Carles gold-copper project in northwestern Spain yields a net present value at a 10 per cent discount of $132 million and an internal rate of return of 42 per cent.

The buy side interest in resource stocks remains at favourable levels but with unemployment in North America soaring one has to wonder how long the optimism will last. We will see what Tuesday trading has in store.

Source: Resource Stock Roundup: Tuesday, February 10th, 2009

The one thing you notice about Silicon Valley is the meetings. They multiply like a fungus. Once inside, you become intoxicated from the heady fumes of whiteboard markers, since the entire culture seems incapable of explaining anything without standing in front of the room to draw organizational charts. Ditto for PowerPoint.

And so the Myth of Empowerment came into being after years of sitting in conference rooms listening to these pretentious windbags. As the Myth of Empowerment goes: The more computing power you give to incompetent people, their incompetence rises commensurate with their reliance on that computing power.

Of course, now that computers are becoming more powerful more quickly, the rise to incompetence is meteoric in some organizations.

It seems that as an analytical tool, The Myth of Empowerment could have predicted why the bottom fell out of Yahoo’s stock price long before the current economic malaise.

Reporter Om Malik, writing for Fortune online, nailed the Yahoo culture in his piece of Nov. 17th. This excerpt could have come directly out of the text of The Myth of Empowerment.

“What hasn’t been discussed is that the company isn’t really facing up to the fact that its layers of management have resulted in a state of masterful inactivity, masked perhaps as a culture of consensus. This starts at the top – from the company’s board and senior management down to VP level where people are prone to organizing and attending twenty meetings before deciding the fate of a project. Some senior managers including the ones who are deserting the company are skillful players in this game of hiding ennui behind grandiose plans and a great future that never happens.”

Malik’s observation was part of a story he wrote regarding the resignation of current CEO and Yahoo Founder, Jerry Yang. This is the guy, along with his board, who fought off a bid by Microsoft earlier this year at $31 per share, because they believed the price undervalued the company. Today, Yahoo is at $11.67.

After he resigns as CEO, Yang will remain on the board and take on the title of Chief Yahoo (seriously) as the company seeks a replacement.

Given the current shortage of cash in the market, everyone now expects Microsoft to make another pass at Yahoo for the lack of other potential suitors. In fact, some wags conjecture that the #1 job of the new Yahoo CEO will be to broker a Microsoft deal.

The someone else part, however, gets real tricky. Private equity has just reached a stand-still. There may have been a Chinese taker earlier in the year, but that market is also under siege. And if the Yahoo board thinks that AOL is a bailout scenario, then more power to them.

A Google deal may have been possible at one point, but the Feds were already making noise that they would kill a prospective alignment with Yahoo as part of joint-marketing and technology-sharing agreement that got shelved in reaction to hostile Feds. And that wasn’t even a full-blown merger.

In the end, it all comes back to Microsoft. Over the past two days, Microsoft’s shares have slipped 9%. This is consistent with the long-term trend of the stock’s price surrounding a takeover of Yahoo.

Whether or not Microsoft approaches Yahoo again largely depends on Yang’s successor. Our expectation is that if Microsoft does manage to buy Yahoo, Microsoft shares will drop. If word leaks of a Microsoft-Yahoo merger, Microsoft will drop. And until the fate of Yahoo becomes definitive, Microsoft shares will continue to drop.