MINING MARKET & INVESTMENT NEWS — EASTERN MARKETS — Eastern markets rebound from previous week’s slump

The markets enjoyed a rebound during the Aug. 12-18 report period, with the Toronto Stock Exchange 300 composite index regaining more than half of the previous week’s losses, climbing 3.2% to 6,517.68. The metals-and-minerals sub-index rose 0.6% to 3,013.23 points, while the gold-and-precious-metals sub-index fared even better, jumping 2.7% to 5,101.05 points.

On the international stage, Russia announced it would permit the devaluation of up to one third of the ruble. The currency will be allowed to trade at a rate of between 6 and 9.5 rubles to the U.S. dollar, whereas previously it was restricted to 15% above or below 6.2 rubles to the dollar. As well, Russia announced it would delay repaying US$42 billion in short-term debt.

Gold prices climbed only 25 cents to US$285.75 per oz. at the London morning fix of Aug. 19, as most of Canada’s major gold miners saw gains for the week: Barrick Gold rose 25 cents to $24.35; Placer Dome was up 15 cents $15.50; Kinross Gold climbed 1 cents to $3.56; Cambior gained 10 cents to hit $7; and TVX Gold shed 15 cents to land at $2.70. The two royalty sisters had a good week, with Franco-Nevada Mining rising $2.45 to $24.85 and Euro-Nevada Mining jumping $1.05 to $15.05.

Copper, lead and zinc prices were essentially unchanged during a period of quiet summer trading. However, nickel prices slipped another 4 cents to just US$1.80, with Inco losing another dime to fall to $15.50 and Falconbridge tumbling $1.05 to $14.95.

Among the other base metal miners, Noranda dropped 90 cents to $20.50; Teck gained 40 cents to $13.15; Rio Algom was up 15 cents to $21.65; and Boliden was still nosediving, dropping another 15 cents to close at just $4.95.

Nebex Resources plummetted 23 cents to 7 cents as the junior’s Albanian venture began to unravel. Nebex was unable to make a final US$300,000 payment of a US$2.5-million purchase agreement to acquire the Munelle base metal concession. It also has outstanding obligations of about $1 million in accounts payable and $1.9 million in bridge loans. On top of these problems, two directors have resigned and a lawsuit has been launched against management.

Nevsun Resources dropped 8 cents to 92 cents as the Vancouver-based junior boosted the resource estimate for its Tabakoto gold project in western Mali by 29%. The primary mineralization now stands at 5.6 million tonnes grading 7.46 grams gold per tonne, equivalent to 1.3 million contained ounces, with a lower-grade, 500,000-tonne oxide cap.

Viceroy Resources dropped 8 cents to $2.35 on heavy trading as the company reported a $1.6-million profit (3 cents per share) in the second quarter on sales of $18.8 million. Gold production at the Brewery Creek and Castle Mountain mines was 14,928 oz. and 23,809 oz., respectively. Currently, the company is preparing for a drill program on its 60%-owned Gualcamayo property in Argentina.

Slipping 51 cents to $2.24, Greenstone Resources entered into an agreement with a syndicate led by Nesbitt Burns under which it will buy 5.5 million shares, to be sold to the public for $2.10 apiece. As well, the underwriters will buy units representing an aggregate of US$5.3 million, with each unit consisting of a US$1,000, 5-year, 12.5% senior unsecured note and 200 share purchase warrants. The notes will rank pari passu with respect to all existing and future senior indebtedness of Greenstone and will not be redeemable prior to maturity. The warrants will have a 5-year term and an exercise price of $2.50. Closing is expected in early September.