Financing triggers higher trading in Bema

The 7-day report period beginning Oct. 20 saw the price of gold rise US$8.15 to close at US$427.50 per oz. in the afternoon of Oct. 26 in London. During the week, gold hit a near 16-year peak; on Oct. 26, however, it fell $1.65. The gold index rose 10.8 points, or 5.1%, to close at 221.20 and the diversified metals and mining index was up by 7.02 points, or 3%, at 240.82 points. The S&P/TSX composite index gained 97.68 points to close at 8,818.18 points.

Bema Gold led the way in volume with 33 million shares trading hands. The stock closed up 1, at $3.72. Bema reported it has arranged a bought-deal financing with a syndicate of underwriters: it will issue 27.4 million common shares at $3.65 per share for gross proceeds of $100 million. The deal allows for the underwriters to purchase up to 6.8 million additional shares at the same price until 24 hours prior to closing. Proceeds will be primarily used at the Kupol property in Russia, a joint venture between Bema and the government of Chukotka. Bema is earning a 75% interest.

Wheaton River Minerals traded 32.6 million shares and rose 5%, or 21, to close at $4.10. Wheaton owns 75% of Chap Mercantile, which trades on the TSX under the symbol SLW (formerly CPC). Chap will ask its shareholders to approve a name change to Silver Wheaton Corp. in early December. Outstanding shares will be consolidated on a 1-for-5 basis. All Chap’s cash flow is derived from silver production. The junior has $19 million in cash and no debt, and has agreed to buy all the silver produced by Wheaton River. Chap rose 25%, or 19, closing at 94 with 2.2 million shares changing hands.

Cambior closed 11 higher, up 3%, at $3.82 on a volume of 27 million shares. The Montreal-based company lost US$6.1 million, or 2 per share, in the three months preceeding Sept. 30. The loss was mainly due to a production shortfall at the Doyon gold mine, caused by unstable ground, and a US$1.9-million restructuring charge following a major reorganization at the mine.

Farallon Resources rose 36%, or 75, and closed at $1.02 on a volume of 2.3 million shares. The company is encouraged by drill results from its Campo Morado massive sulphide project in Mexico’s Guerrero state. One hole cut 72 metres grading 0.9 gram gold, 140 grams silver, 0.28% copper, 1.09% lead and 5.54% zinc. A prefeasibility study should be completed by mid-2005.

Peru Copper was down 23, or almost 18%, and closed at $1.30 on a volume of 1.8 million shares. Drilling is progressing at the Toromocho copper resource in Peru, and the company has raised $7.4 million by issuing 4.5 million units priced at $1.65 apiece.

Aur Resources was up 13 and closed at $6.15 after 2.5 million shares crossed the floor. After the market closed on Oct. 26, Aur reported it would begin paying a dividend of 10 per share starting in January 2005. Aur also reported earnings of US$20.7 million in the third quarter of 2004, up from US$3.1 million in the comparable quarter of last year.