Merger plans boost Iamgold share price

The report period has been reduced to two days this issue because The Northern Miner office is moving. The Aug. 10-11 period saw the price of gold close down US$5.15 at US$393.85 per oz. in the afternoon in London.

The gold index was down 2%, or 3.68 points, to close at 181.60. The diversified metals and mining index closed up 1%, or 2.19 points, to close at 207.86. The S&P TSX composite index was down 0.18%, or 15.2 points, to close at 8,168.24 points.

Wheaton River Minerals led the way in volume, trading 10.5 million shares. It lost 4%, or 13 to close at $3.12. The Wheaton board continues to reject takeover advances made by Coeur d’Alene Mines. Wheaton recently reported a 90% jump in second-quarter profit.

Iamgold shares shot up 12% on Aug. 11, following the announcement that Gold Fields and Iamgold are planning to merge. Gold Fields shareholders will own about 70% of the new company, which will own Gold Fields’ assets outside the “South African development community.” The new company will be called Gold Fields International. Iamgold’s board is supportive of the deal. The stock gained 8%, or 59, to close at $7.84 on a volume of 7 million shares.

Golden Star traded 3.7 million shares on Aug. 11, and 4.2 million shares over the period. The stock fell 2.7%, or 14, to close at $4.91. Golden Star’s cash and stock offer was to close Aug. 16, whereas the Gold Fields deal will only close by year-end. At presstime. Golden Star’s offer was worth $6.31 per Iamgold share — 18% below Iamgold’s stock price.

Thistle Mining traded third in volume, with 4.9 million shares changing hands. The stock was up 1 and closed at 9. Thistle restructured its gold-hedging program and closed out its forward sales of about 491,500 oz. gold at a price of US$397.50 per oz. The resultant liability will be spread out over three years.

Placer Dome fell 83, or 4%, to close at $20.59 on a volume of 3.9 million shares. Bema Gold has threatened to drag Placer into arbitration in a dispute over the Cerro Casale gold and copper project in Chile. Bema traded 2.4 million shares, falling 25, or 8%, to close at $2.77.

Queenstake Resources traded 2.4 million shares and fell 1 to close at 44. Queenstake announced it has raised $17.13 million via a private placement and that it can now settle all its obligations regarding the purchase of the Jerritt Canyon mine in Nevada. This payment is 2.5 years in advance of the final payment date that had been agreed upon with the vendors.

Tahera Diamond traded 3.9 million shares and rose 2 to close at 33. There was no news to account for the volume. Tahera is obtaining authorization for a water license and land leases at its Jericho diamond project in Nunavut, which received development approval in June.

Rubicon Minerals closed up 5 at $1.21. On Aug. 11, the company released drill results from its Red Lake project area. Highlighting these is a 3-metre intercept grading 70.1 grams gold per tonne.