Canadian markets performed on the last week

Well, the first full trading week of 2011 was packed with a lot of punch. Takeover deals stepped to the fore, with earnings season right around the corner. And, just to add to the flavor, the junior bourse posted record daily trading volumes on Thursday. So we know there is action in the more speculative issues as well. And, once all the trading was done the TSX Ventures Exchange, home to more junior exploration companies than anywhere else in the world, had added 2.05 per cent, while the TSX Gold Index had lost 2.80 per cent.

So, the deals continue to come thick and fast?

That’s right. The big news of the week was the proposed nuptials between Inmet Mining and Lundin Mining. The two companies agreed to merge in a move that would create a Canadian base metal miner with a market value in excess of C$9 billion. Under the deal, Inmet shareholders will get 3.4918 shares of a new company called Symterra, while Lundin shareholders will get 0.3333 of a Symterra share. Inmet’s chief executive Jochen Tilk will be Symterra’s chief executive and president. Inmet has operations in Turkey, Spain, Finland and Papua New Guinea, while and is developing the Cobre copper mine in Panama. For its part, Lundin has four mines in Europe, and a stake in the Tenke Fungurume copper and cobalt project in the Democratic Republic of Congo. The market liked the idea, and Inmet ended the week up C$4.45 at C$78.95, while Lundin tacked on C$0.59 to close at C$7.66.

But that’s not the only hook-up currently on the cards, is it?

No indeed. Moving over to iron ore, Cliffs Natural Resources is taking a run at Consolidated Thompson Iron Mines in an all cash deal valued at C$4.9 billion. The C$17.25 per share offer has the support of Consolidated’s board of directors. Cliffs’ operations at Wabush Mines are close to Consolidated’s projects in the Labrador Trough, an area that covers from Northeastern Quebec right into Western Newfoundland and Labrador. Consolidated ended the week up C$4.18 at C$17.40, while NYSE-listed Cliffs was also better off, up on the week from some way short of US$85 to US$88.84.

Not to be left out, HudBay Minerals agreed to acquire Norsemont Mining for C$520 million. The move would give HudBay the advanced Constancia copper project in Peru. HudBay will pay 0.2617 of a share and C$0.001 in cash, or alternatively C$4.50 in cash, for each Norsemont share, subject to a maximum cash payout of C$130 million. HudBay ended the week up C$0.47 at C$17.23, while Norsemont added C$0.36 to close at C$4.63.

It is interesting to recollect that an investor backlash stymied the C$672.4 million plan merger between Lundin and HudBay that was floated in 2009. How is the battle for Baffinland Iron Mines playing out

It is a case of “if you can’t beat them, join them.” Rival bidders ArcelorMittal and Nunavut Iron Ore Acquisition have elected to stop forcing up the price by agreeing to join forces in a joint bid that values Baffinland at around C$590 million. The new price being offered is C$1.50 per share. If the deal is completed under the new terms it would give ArcelorMittal 70 per cent and Nunavut 30 per cent of Baffinland. Baffinland itself closed at C$1.55 for a C$0.13 gain.

It wasn’t all good news, on your side of the pond, surely?

On the down side, Grande Cache shareholders ran for the exits after the company raised its cost guidance and cut its sales guidance for the year ending March 2011. Sales guidance now stands at between 1.5 million to 1.6 million tonnes, while costs were raised to between C$125 and C$130 per tonne. Grande Cache ended the week down C$0.62 at C$11.12.

And AQM Copper failed to get any joy after announcing its first mineral resource estimate for the main zone of its Zafranal project in Peru. The project, an equal partnership between AQM and Teck Resources, holds a measured and indicated resource of 301 million tonnes grading 0.47% copper. AQM ended the week down C$0.05 at C$0.90.

Still in base metals, Donner Metals and its partner at the Matagami mine camp in Quebec, Xstrata Canada, tabled a resource calculation for the PD1 deposit. The measured and indicated resource tallied 1.74 million tonnes grading 4.55% zinc, 1.16% copper and 19.88 grams silver per tonne. Donner ended the week unchanged at C$0.27.

In uranium, Uranium One added C$0.90 to close at C$5.43 after reporting a record attributable production in the fourth quarter of 2.1 million pounds of U308.

Meanwhile, Strategic Metals added C$0.58 to close at C$2.80 after announcing plans to spin off two of its silver projects into a new company. Under the deal shareholders will get one share and one-half a warrant for every one Strategic share held.

Any drilling news?

Taseko shares went sharply higher after the company released drill results from its Aley Niobium prospect in British Columbia. Highlights included 142 metres running 0.82% Nb2O5. The copper miner ended the week up C$0.82 at C$5.84.

And Intrepid Mines tapped into 429 metres running 0.53% copper and 0.38 gram gold per tonne at its Tumpangpitu prospect in Indonesia. Intrepid ended the week up C$0.12 at C$1.94.

According to media sources, there were 1,165 global mining deals done in the past 12 months, and based on the trend this week 2011 could well deliver an even greater number. We will see what next week has in store.

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