Canadian markets performed over the past week

Merger mania continued to be the central theme on the Canadian markets, with investors speculating which companies will be next on the takeover list. On the macro side, the Bank of Canada held interest rates at one per cent and that left the Canadian dollar trading near par with its United States counterpart. So, once all the trading was done, the TSX Ventures Exchange, home to more junior exploration companies than anywhere else in the world, had lost a modest 0.24 of a per cent, while the TSX Gold Index had dropped 1.54 per cent.

Let’s start off on the deal making front.

Well, it looks like NovaGold Resources is trying to enhance the prospects of its 50 per cent-owned Galore Creek project in British Columbia by making a bid to take over neighbouring Copper Canyon Resources. Under the deal, Copper Canyon shareholders would get 0.0425 of a NovaGold share for each Copper Canyon share. That values Copper Canyon at around C$0.60 per share. Copper Canyon's principal asset is its 40 per cent interest in the Copper Canyon copper-gold-silver property adjoining the Galore Creek project, which is held equally by Teck Resources and NovaGold.

The huge Galore Creek project has been stalled for some time because of capital costs.

True, and if Teck can’t find a way for it to work at these commodity prices, one has to wonder if it will ever work. So it would be no surprise to learn that NovaGold is aiming to beef up the resource even more with the addition of Copper Canyon’s ground. The bid looks low, though, because Copper Canyon closed out the week down C$0.04 at C$0.81, while NovaGold closed down C$0.66 at C$12.83.

What else is going on?

Political risk continues to plague the long stalled out OceanaGold’s Didipio copper-gold project in the northern Philippines. The word is that a resolution issued by the Philippines Human Rights Commission recommends the withdrawal of the Didipio mining permit. OceanaGold remains committed to developing project, which is on schedule for production in the first quarter of 2013. Despite that commitment, OceanaGold closed down C$0.34 at C$2.77.

Meanwhile, shares of Moly Mines fell after the company cut revenue forecasts for its prospective Spinifex Ridge molybdenum-copper project in Australia 25 per cent. The cut is due to strength in the Aussie dollar. Moly Mines closed at C$1.23 for a C$0.18 loss.

So a down week for some recent favourites, but an up week for some in iron ore?

Adriana Resources was one winner, after it inked a deal with a unit of China's Wuhan Iron and Steel to advance the Lac Orelnuk and December Lake iron ore properties in Quebec. The Chinese company will pay C$120 million for a 60 per cent stake in the properties and take down a 19.9 per cent interest in Adriana through a private placement. Adriana closed up C$0.09 at C$1.48.

And the strength wasn’t just in iron ore. Shares of Rockgate Capital added C$0.31 to close at C$2.80 after the company announced an updated resource for the Falea uranium-silver-copper project in Mali. The contained uranium now stands at 27.8 million pounds with silver at 40.6 million ounces and the copper coming in at 55.4 million pounds.

You’ve also had some news from under the sea?

Yup. Shareholders of Nautilus Minerals were a happy lot after the company announced that it has been granted the world's first deep-sea mining lease for the development of its copper-gold Solwara 1 project in the Bismarck Sea. Nautilus ended the week up C$0.60 at C$2.80.

In drilling news, Newstrike Capital cut an impressive 214 metres grading three grams gold per tonne and 5.5 grams silver per tonne at its recently acquired Ana Paula project in Mexico’s Guerrero Gold Belt. Not surprisingly, shares in Newstrike rose, to end the week up C$0.20 at C$1.25.

Sticking to the Guerrero belt but flying under the radar screen, Torex Gold Resources tagged 48.8 metres grading 4.5 grams gold per tonne outside the known resource area of its multi-million ounce Morelos gold project. Despite some nice numbers, Torex ended the week down C$0.06 at C$1.49.

Over to diamonds, where Lukas Lundin-led Lucara Diamond has announced a C$60 million non-brokered private placement comprised of 60 million shares priced at C$1.00 apiece. The new funds will be used to develop the AK6 diamond mine in Botswana and the Mothae diamond mine in Lesotho. Lucara ended the week up C$0.16 at C$1.15.

And still in diamonds, Charles Fipke-led Metalex Ventures tabled preliminary macrodiamond results from the first of 11 holes testing the U2 kimberlite pipe in Ontario’s James Bay Lowlands. The results came in at 18.1 carats per 100 tonnes, not far off the 23 carats per 100 tonnes tallied at the nearby Victor diamond mine of De Beers. Not enough for the market, though, and Metalex ended the week down C$0.01 at C$0.62.

With the uranium spot price creeping up towards the US$70 per pound mark, it wasn’t a bad time to be making a uranium discovery. Southern Andes Energy added C$0.12 to close at C$0.67 after announcing a uranium discovery on its Tupuramani property in Peru. Surface sampling returned 0.32 per cent U308 over 20 metres.

The overall market was a bit choppy but the economic outlook for Canada suggests that the setting for now is steady as it goes. We will see what next week has in store.

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