De Beers’ Winspear takeover ignites diamond sector

Activity in Canada’s junior diamond scene heated up during the Aug. 9-15 report period, with the sector helping to drive up the Toronto Stock Exchange’s gold and precious minerals sub-index by 4.6% to 3,991.67 points and the TSE 300 index by 1.6% to a record 11,032.25 points.

The most active diamond junior was Winspear Resources, which shot up 66 to $4.96 as De Beers Consolidated Mines sweetened its cash takeover offer to $5 from $4.25 per share — an offer Winspear’s directors have unanimously endorsed. Winspear’s Snap Lake project, in the Northwest Territories, will be De Beers’ first wholly owned, economic diamond property outside of Africa.

Jumping $1.05 to $11 on heavy volume was Aber Resources, joint owner (with Rio Tinto) of the Diavik diamond project, also in the Territories. Triggering Aber’s climb was a cross-trade on Aug. 15, by UBS Bunting Warburg, of a 1.6-million block of shares priced at $10 per share plus a further series of cross-trades totalling 1 million shares.

Vancouver-based Mountain Province Mining rose 7 to 70 as the junior released results from a study of the AK and CJ properties, in the Territories, by its partner, Monopros, the exploration arm of De Beers. The study showed that an increase in diamond values of about 15% is needed to proceed with a full feasibility study. Monopros now holds a 51% interest in the project, with Mountain Province holding 41.1% and CDNX-listed Camphor Ventures a 4.9% interest.

Several other diamond juniors had eventful weeks: Namibian Minerals fell 5 to $3.60 as the marine miner unveiled lower second-quarter earnings and revised its 2000 production target down to 225,000 carats; Twin Mining was unchanged at 70 as positive results were released from two 10-tonne samples from the Torngat property in Nunavut; SouthernEra Resources rebounded 25 to $1.65 as the company’s new board moved to revise the termination agreements of former officers; and miner Dia Met Minerals‘ B shares fell $1.45 to $16.75, but rebounded to $17.25 at presstime.

Gold staged a bit of a rally on thin trading, rising US$3.25 to reach a London morning fix of US$275.50 per oz. on Aug. 16 as Canada’s strongest gold majors advanced: Barrick Gold rose $1.60 to $25.40; Placer Dome gained 35 at $12.95; Franco-Nevada Mining shot up 50 to $15.65; and Kinross Gold shed its penny-stock status by gaining 1 to hit $1.

Canadian base metal majors were mixed: Inco gained 90 to $24.20; Falconbridge was up 40 at $17.25 despite an ongoing strike in Sudbury; Noranda was down 40 to $14.80; Rio Algom rose 80 to $19; Teck‘s B shares rose 30 to $9.30; and Cominco fell 50 to $18.50.