China’s Tibet policies back on the front burner

The holiday-shortened week ended March 22, the twelfth trading week of 2008, was a time for most market participants to catch their collective breath after the tumultuous gyrations in the world’s stock, bond and commodities markets earlier in the month.

• Global geopolitics took centre stage with the Chicoms showing their true face again as they orchestrated a harsh repression of ethnic Tibetans in occupied Tibet, as well as in nearby Chinese provinces with significant populations of ethnic Tibetans.

As has been widely reported, the Tibetan capital of Lhasa was a hotspot, with Tibetans looting and vandalizing Chinese businesses and Chinese soldiers flooding into the area to shoot, club and arrest rioters and Tibetan Buddhist monks. The timing of the rioting coincided with the 49th anniversary of a failed uprising against Chinese rule.

The only Canadian miner with a significant asset in Tibet is the Hunter Dickinson vehicle Continental Minerals, with its 220- million-tonne Xietongmen copper-gold-silver deposit, located 240 km southwest of Lhasa. Continental has carried out a highly successful exploration and development program there over the past three years, and assiduously cultivated its relationship with its government partner. However, if relations between the Chinese and Canadian governments sour in the lead-up to the Beijing Olympics, the motivations for the Chinese to keep playing nice with a Canadian partner in the contentious region could soon dissipate.

Trading at a large discount considering its high-quality assets, Continental’s stock hit a new 52-week low as the week ended, and the company is lying low, too.

• On the topic of soured relations, here in Ontario six members of the Kitchenuhmaykoosib Inninuwug (KI) First Nation were sentenced to six months in jail by the Thunder Bay Superior Court. Last December, the six were held to be in contempt of court on account of their refusal to abide by a court order that confirmed Platinex’s legal right to drill on its mining claims and leases near Big Trout Lake. Platinex notes that it did not seek incarceration as a penalty. Indeed, the contemnors’ own lawyer asked for it instead of monetary penalties. Platinex also brought its damage claim back to Earth, reducing it from $10 billion to $10 million.

• Down Under in Brisbane, Lihir Gold unveiled a friendly bid for Equigold, whereby Equigold shareholders will receive 33 Lihir shares for every 25 shares held, or a 24% premium.

The new gold powerhouse would have a A$9-billlion market cap and produce 1.2 million oz. gold per year beginning next year from assets in Papua New Guinea, Australia and Cote d’Ivoire. The jewel in the crown would remain the “supergiant” Lihir gold mine in Papua New Guinea, where the orebody hosts more than 35 million oz. gold in the measured and indicated resources, plus another 4 million inferred oz.

• All wasn’t as rosy further down gold’s food chain, as BacTech Mining and Scorpio Mining’s 93%-owned subsidiary Scorpio Gold nixed their previously announced merger.

Among other things, the TSX Venture Exchange required a working capital infusion of $4 million into the combined company in order to grant its approval to the merger, and BacTech said that Scorpio was to have raised the money, but couldn’t.

In its own press release, Scorpio said this wasn’t true, and that the two had mutually agreed that Scorpio and BacTech would raise $3 million and $1 million, respectively. Scorpio says BacTech then decided not to proceed with the financing.

Scorpio Mining still wants to spin out Scorpio Gold as a public company.

• After an embarrassing axing of a proposed equity financing that was supposed to bring in US$130 million, NovaGold Resources regrouped and priced a public offering of US$95 million in convertible senior notes due May 1, 2015. Some of the funds will be used to pay off a temporary US$30-million credit line negotiated with Scotiabank in February. Alas, with NovaGold shares now trading at around US$8, that juicy US$16-per-share offer from Barrick Gold that NovaGold shareholders spurned with such bravado in 2006 keeps looking better and better.