Toronto Stock Exchange Equinox, LAC advance on Rosebud intersection

The fact that financier Sir James Goldsmith has parked 28 million shares of Newmont Mining in a Vancouver-listed investment firm known as General Oriental Investments finally came to light during the week ended June 18.

Until this was revealed at BGR Precious Metals’ annual meeting in Toronto recently, few in Canadian mining circles had even heard of General Oriental, let alone known about the extent of its holdings.

BGR, which has suffered along with other closed-end investment gold funds, stumbled upon General Oriental a few months ago when it was brought to BGR’s attention by one of its directors. BGR has already bought an undisclosed number of shares believing that General Oriental will be the biggest shareholder of an entity containing the combined assets of Newmont and American Barrick Resources, should the two gold miners merge.

If Horsham, which controls Barrick, were to merge with General Oriental, the combined company would own 30% of an entity with annual production of at least 2.6 million oz. gold, according to BGR. But clearly there is a lot of negotiating to be done before anything is finalized.

In a week when a falling bond market kept investors on the sidelines, LAC Minerals and partner Equinox Resources offered some excitement with a hot intersection at their Rosebud joint venture in Nevada. Drilling on the property returned 178 ft. of grade 0.72 oz. per ton, not far from another impressive 370-ft. intersection.

Ironically LAC headed the active list as the price of gold fell by US$3.30 this week to finish at US$367.40 in London. However, even though the yellow metal failed to sustain recent gains, a number of gold issues including LAC finished on an upbeat note. LAC added 38 cents today to close at $9.25. Barrick, Echo Bay and Placer Dome each added 13 cents while Hemlo Gold stayed even at $10. Pegasus Gold, which advanced to $15.13 earlier this week, closed down 25 cents today at $14.88.

Rumors have Corona being viewed as a takeover target by Placer Dome and Minorco, the Luxembourg company that is purchasing all of Inspiration Resources’ interest in Hudson Bay Mining & Smelting. While Corona isn’t formally up for sale, insiders are believed to be ready to cash out at a time when a number of gold producers are restructuring in a bid to add value to their shares.

For example, shareholders of all of the Pamour Group of companies involved in the proposed merger with Royal Oak Resources will meet to consider the offer June 27, according to a statement by the Ontario Securities Commission.

The OSC says it won’t prevent minority shareholders of each company from exercising their voting rights at those meetings. Shares of Royal Oak advanced by two cents to 87 cents.

Equinox, meanwhile, shot up 45 cents today to $2.20 as investors moved to get in on the Rosebud project where preliminary reserves are estimated at 2.3 million tons grading 0.23 oz. gold.

The first week of extended trading hours closed today, June 19, with a 20.40-point drop in the composite 300 index. As the weak bond market continued to take its toll on share prices, 22.2 million shares worth $225.2 million changed hands.

Other active stocks included Platinova Resources which is planning to move its business to Greenland where the company is actively exploring for gold and palladium on the Skaergaard Peninsula. Platinova ended the week up one cent at $1.56. Shares of Thunderwood Resources were also active as investors prepared for today’s annual meeting in Toronto. However, the issue retreated to $1.18, down five cents today.

Inspiration Resources has tentatively accepted a $100-million cash offer for its Hudson Bay subsidiary from Minorco. However, Inspiration has until July 31 to solicit other offers that exceed Minorco’s price by at least $5 million.

Placer Dome purchased by way of a private placement an additional 1.4 million common shares of VSM Exploration at $1.07 per share. Proceeds of the acquisition, which increases Placer Dome’s interest in VSM to 54% from 50.7%, are earmarked for exploration on the Grevet zinc-copper-silver property, north of Val d’Or, Que. VSM gave up a cent to close at 94 cents.

Curragh Resources was unchanged at $6.38 after unionized employees at the company’s Faro lead-zinc operation in the Yukon agreed to end a 10-week strike. The mine produced 548,000 tons of concentrate last year.

Finally, the Madeleine Mines issue is proving to be remarkably resilient despite this week’s US$11.50-per-oz. drop in the price of platinum. Madeleine closed up 13 cents today at $5.13.