Canadian markets performed over the past week

A blockbuster deal in the gold space and record-setting copper prices helped propel the resource-rich Canadian markets higher. Once all the trading was done, the TSX Ventures Exchange, home to more junior exploration companies than anywhere else in the world, had added 4.5 per cent, while the TSX Gold Index had tacked on 2.3 per cent.

Let’s start off with the takeover deal.

Well, Newmont Mining went shopping and elected to buy Fronteer Gold. Under the terms of the friendly deal, Newmont will pay C$14 per share in cash, and give Fronteer shareholders one share in a new company called Pilot Gold. Of interest to Newmont is the million ounce Long Canyon project in Nevada and other advanced assets Fronteer holds in Nevada. Pilot Gold gets C$10 million in cash plus exploration properties in Nevada, Turkey, and Peru.

Still, one has to wonder if a rival bid is waiting in the wings.

Barrick Gold has been mentioned, but given the cordial relations between Fronteer and Newmont, a rival bid looks unlikely. Fronteer ended the week up C$4.40 at C$14.33.

Sticking to the gold theme, shares of New Gold added C$0.79 to close at C$8.99, after the company reported fourth quarter production of 124,445 ounces of gold at total cash costs of US$354 per ounce. For 2010, output hit 382,911 ounces of gold at cash costs of US$428 per ounce.

Also better off was Detour Gold, which surged C$4.32 to C$30.90 after posting updated reserves and resources at its Detour Lake project in Ontario. Reserves now stand at 14.9 million ounces, while the global reserve tallies roughly 26 million ounces of gold.

Buyers also came in for Alamos Gold following exploration results from its Mulatos gold project in Mexico. Highlights included 1.24 grams gold per tonne over 15.25 metres at the El Carricito target. An updated reserve-resource estimate is expected in March. Alamos closed at C$16.91 for a C$1.41 gain.

And news that drilling will be commencing in March on the Goose Camp area of Nunavut sent shares of Sabina Gold & Silver higher. Sabina added C$0.84 to close at C$5.88

And the copper sector was pretty buoyant, too?

Copper hit a record high in London and New York, reaching US$10,000 a tonne. The jump is being attributed to recovering global economies and the news that Xstrata closed its copper operations at Mount Isa in Australia because of the effects of tropical cyclone Yasi. Equinox Minerals took advantage of this development to update the Chimiwungo resource potential and lay out an expansion strategy for its Lumwana copper mine in Zambia. Equinox added C$0.78 on the week to close at C$6.63.

Meanwhile, Sunridge Gold added C$0.27 to close at C$1.27 after tabling results from its Debarwa copper-gold-zinc deposit on the Asmara project in Eritrea. Highlights included 31.85 metres running 5.72% copper and 2.13 grams gold per tonne.

And Lara Exploration got a boost after its partner on the Lara project in southern Peru, Redzone Resources, cut 0.57% copper and 0.04% molybdenum over 218 metres, including 0.88% copper and 0.05% molybdenum over 30 metres. Lara added C$0.21 to close at C$1.74, although Redzone actually fell C$0.02 to close at C$0.58.

And the run up in uranium prices also continued.

Yep, spot U308 price increased to US$73 per pound, a gain of US$3.00 on the week. Riding the uranium wave, Denison Mines reported that 2010 sales amounted to 1.8 million pounds of uranium, generating revenues of US$86 million. The company also stated that it will cut production this year to focus on exploration, as it looks to boost output to at least 10 million pounds of U308 a year by 2020. Denison added C$0.49 to close at C$3.87.

Elsewhere, in the potash space, Canadian potash marketer Canpotex announced a price increase for product sales in Asian and Latin American markets. Standard grade now comes in at US$460 per tonne, up about US$30 per tonne. This is good news for the likes of Potash Corporation of Saskatchewan, which closed the week at C$179.16 for a C$5.17 gain.

The jobs figures in the United States continued to look bleak in January despite a drop in the unemployment rate to nine per cent. However, optimism seems to be running high, and Canada should benefit from this because of a strong commodity based economy. As we discussed at the end of 2010, the Canadian IPO market is poised for a strong year, with a bunch of deals expected to hit the C$1 billion mark. We will see what next week has in store.

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