Editorial: Aurelian delivers big time

A remarkable gold-discovery story stood head and shoulders above the rest of the mining industry during the week ended Oct. 6, the 40th trading week of 2007

* There are certain milestones every mining company hopes to pass as it develops a gold resource: a million ounces is a decent deposit that can probably support a small mine; a 5-million-oz. deposit can be dubbed “world-class” and will pique the interest of major gold producers; and a 20-million-oz. deposit is that rarest of prizes, a “super giant” that can become a cornerstone asset for the world’s biggest mining companies.

Well, Toronto-based Aurelian Resources shocked us by leaping the first two hurdles in one go this week, as it tabled the first-ever resource estimate for its 17-month-old Fruta del Norte discovery in southern Ecuador, tallying an astonishing 13.7 million oz. gold plus a 25-million-oz. silver sweetener. This comes from an inferred resource of 58.9 million tonnes grading 7.23 grams gold per tonne and 11.8 grams silver.

With this resource finally out in the open, Aurelian is now in play as a takeover target. Barrick Gold and Newmont Mining are two obvious bidders, as both have substantial gold mines in Peru and might reckon they could manoeuvre through Ecuador’s similarly tricky politics. Other companies that could jump in on any bidding war are Iamgold, which has been very active in Ecuador for years, and AngloGold Ashanti, which has shown its readiness to take on the region’s risk with its increasing grassroots involvement in Colombia.

* Margaret Kent, the former CEO of the doomed Royal Oak Mines, still has the capacity to surprise, having come up with an unusual, in-your-face solution to a longstanding legal battle.

In her current role as head of Century Mining, Kent has kicked off a hostile, all-share takeover of Sulliden Exploration, which Century has been battling in Peru’s courts for four years over who owns the Shahuindo gold property.

While Century has been getting the upper hand over Sulliden in the courts of late, a successful takeover — which may yet turn friendly — would eliminate a couple more years of high lawyers’ bills on both sides and allow the enlarged company to focus its attention and dollars on the far more profitable activity of mine development.

* The mining industry in northwestern B.C.’s remote, rugged mountains got a major lift this past week, with B.C. Premier Gordon Campbell appearing at the Asia Pacific Mining Forum in Vancouver to announce a long-needed, $400-million northwestern extension of the province’s electrical grid, with a new 287-kilovolt line that will extend 335 km from Terrace to Meziadin Junction and north to Bob Quinn Lake. One of the biggest beneficiaries of the extension, the Galore Creek joint venture between Teck Cominco and NovaGold Resources, will chip in $158 million towards the cost. The extension also has the support of the region’s Tahltan First Nation, who have forged an exemplary relationship with the mining companies at Galore Creek, to everyone’s benefit.

* Federal natural resources minister and B.C. native Gary Lunn also used the Asia Pacific Mining Forum to launch a promised $150-million initiative to streamline Canada’s regulatory system for mine development. The centrepiece is the creation of a new “Major Projects Management Office” (MPMO) that will provide miners with a single and hopefully more efficient point of entry into the federal regulatory process.

* We note the passing on Sept. 27 of a stalwart of B.C.’s mining and exploration scene, Robert (Bob) Hunter, co-founder of the highly successful Hunter Dickinson Inc., which gave birth to many profitable mining enterprises in B.C. and around the world.

Hunter started out his working life as an accountant and insurance salesman before heading into the high-stakes world of junior mining in the late 1970s. But the real magic happened when Hunter, with his genial personality and promotional prowess, teamed with technical wiz Bob Dickinson in the mid-1980s under the Hunter Dickinson Inc. umbrella. Hunter went on to receive the Developers Award from the Prospectors and Developers Association of Canada in 1990 and the Murray Pezim Award for Mineral Financier of the Year by the BC-Yukon Chamber of Mines in 2001.

In lieu of flowers, the family asks that donations in Bob’s memory be made to Burnaby, B.C.’s New Vista Foundation (www.newvista.bc.ca ).