Inco aims for full control of Voisey’s Bay

Casting the spotlight on base metals once again, Inco has offered to buy back its Class VBN shares for $195 million in cash and 11.7 million warrants. The shares equate to a 25% stake in cash flow from the giant Voisey’s Bay nickel deposit in Labrador, which, if eliminated, would give the major complete control of the project.

Inco ended the holiday-shortened report period Aug. 30-Sept. 5 at $27.10 — a jump of $1.85 over the previous period. The VBN-class shares were up $2.50 at $11.15.

In other news, Rio Algom has refused Noranda‘s request to review its operations and books, saying its agreement with London-based Billiton prevents it from doing so. Rio closed down 10 at $28.60, whereas Noranda ended 45 higher at $14.95. Noranda says it is now considering its next move with partner Corporacion Nacional del Cobre de Chile (Codelco), the Chilean-state mining enterprise.

A strike at Falconbridge‘s Sudbury operations entered its fifth week, with union representatives having unanimously rejected the company’s latest offer. The major says it can meet its delivery requirements for another five weeks but would have to declare force majeure should the strike continue longer. Falconbridge ended the period at $19.25, for a gain of 50.

Other base metal miners were similarly upbeat: Cominco rose $1 to $22; Teck‘s B-series rose 50 to $11.25; Sherritt International rose 5 to $5.10; and Boliden jumped 13 to $1.38. The positive performances helped push the TSE’s metals and mineral’s sub-index 3% higher to 3,688.69 points.

Gold jumped $2.70 during the report period to land at a London morning fix of US$275.30 per oz. on Sept. 6. The yellow metal’s rise was paralleled by a 2% increase in the TSE’s gold and precious metals sub-index, which ended the period at 4,154.97 points.

Canada’s major producers all made gains: Placer Dome climbed 55 to $13.55; Barrick Gold rose 25 to $23.85; and Kinross Gold edged ahead 4 to $1.

Similar news had an opposite affect on Miramar Mining, which rose 4 to $1.30 despite having announced a $1.3-million loss for the second quarter. Concurrently, the junior miner stated its intention to focus on gold alone by selling 80% of its shares in Northern Orion Explorations, which has interests in several copper-gold projects in Argentina and one in Cuba.

Among diamond players, SouthernEra Resources climbed 5 to $1.90. The company is preparing to drill a hole into its MacKay Lake property in the Northwest Territories, which it believes may host the northeastern extension of the NW Snap Lake kimberlite dyke.