In week notable for new record, nominal highs for uranium and nickel prices, it was organized labour action in the railyards that was foremost in grabbing the attention of Canada’s resource sector.
Thankfully, late on Sat., Feb. 24, CN and the United Transportation Union reached a tentative deal to end a strike by 2,800 railway conductors and yard-service workers.
During the week, both the Mining Association of Canada and the Mining Association of British Columbia called for a quick end to the strike and, by Friday, the federal government had tabled back-to-work legislation — which will now be suspended.
The union members still need to ratify the agreement, with voting results expected on March 26.
Look for the negative effects of the strike to show up in slightly higher cash costs for Canadian mines in the first-quarter results released in three months’ time.
Interestingly, both majors forecast that their 2007 gold output will sag even as new mines are brought on-stream. However, in terms of the increasingly difficult task of reserve replacement, Barrick had the definitive leg up over its rival thanks to its takeover of Placer Dome’s quality ounces early in 2006.
While both companies covet the “gold premium” built into their share prices, there’s nothing quite like the appeal of making large profits, so both Barrick and Newmont are hanging onto and even expanding their non-gold holdings, which include silver, platinum, copper, nickel and diamond assets.
Wolfden said that the two companies had agreed on a period of exclusive negotiations that would last until March 7. Zinifex would investigate Wolfden’s assets during the period, and Wolfden would not solicit other offers for the business.
The somewhat half-hearted and unpolished unveiling of the friendly takeover bid makes us suspect that the two feared some kind of leak and had to rush out a public announcement.
On Tuesday the company announced that production has started on its large Orca quarry on the northeast coast of Vancouver Island, and followed up two days later with a $54-million bought deal financing led by GMP Securities.
Polaris owns 88% of the Orca quarry with the remaining 12% participating interest held by the ‘Namgis First Nation.
To cap off a great few months, Polaris will be at the accepting the “e3 Environmental Excellence in Exploration Award” at the Prospectors and Developers Association of Canada convention in early March.
Another 69 million tonnes at similar grades lie in the measured and indicated categories.
The new reserve figures represent a 24% and 33% increase in the copper and cobalt grades, respectively.
The stock closed the week at an all-time high of $8.70.
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