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CANADIAN STOCK EXCHANGES - APRIL
2009 E. A. SCHILLER With gold floundering the market is looking for a metal leader to spur some interest in market activity for junior resource companies. In concert with gold, silver, platinum and palladium are going the same way. Copper seems to be showing some signs of a leader as are nickel, zinc and lead whereas uranium is moving sideways to slightly downwards. Diamond explorers are suffering due to market conditions as a result of sagging jewellery sales with world wide belt tightening. (see comments below). So what can we tell you as the easter bunny appears on the scene. On top of my copper hit parade is Copper Mountain Mining Corporation (CUM-TSX-V), one of the best managed B C managed exploration and development companies with a 100% interest in the Copper Mountain project near Princeton, BC, 300 kms east of Vancouver and just north of the US border. Accessibility and infrastructure are all available in this once active mining community. The project covers 18,000 acres of mineral claims and crown grants over the former producing Copper King deposit and satellite deposits formerly mined by Newmont Mining and others. In 2008 a total of 63,126 meters of drilling was completed making it one of the largest drilling programs in Canada. In previous years drilling programs of the same magnitude provided exceptional drill results of what will become a major copper operation in about three years. The objectives of the drilling program were to increase the size and grade of the overall resource base, particularly in areas adjacent to and below the currently defined Super-pit area and discover and/or define new zones of mineralization. Interim measured and indicated resources based on 0.2% cut-off are 227.5 million tons grading 0.37 % Cu containing 1.7 billion pounds of copper. Inferred resources at 0.2% Cu cut-off are 197.2 million tons grading 0.31% Cu containing 1.2 billion pounds of copper. This resource estimate is based on 4,400 historical drill holes, 67 drill holes from 1997 and 84 holes drilled by the company to July 20, 2007. Revised and updated resource figures based on drilling since 2007 are pending. In October, 2008 Copper Mountain announced a Memorandum of Understanding with Mitsubishi Metals Corporation (MMC) for project financing and off-take. MMC has agreed to purchase a 25% equity stake in the project for $28.75 million. MMC also brings $250 million of debt financing to the project which is assumed to be 100% of the debt requirement (approximately 65% of the initial Capex). CUM stock in 2007 was $2.50 and $1.50 in 2008 and today around 50 cents. Like all stocks it has suffered the current downturn. The project future looks promising based on studies to date and a partner with deep pockets. The diamond dilemma became very evident this month when Harry Winston Diamond Corp (HW-TSX) planned two production shut downs and futher delays in underground activities at their Diavik mine at Lac de Gras, Northwest Territories. HW, formerly Aber Resources and with partner Rio Tinto were the second diamond mine to go into production after DiaMet come BHP Billiton put their Ekati diamond mine in 1998. HW stated that Diavik would shut down from mid-July to late August with a second shut down from December 09 to mid January 2010. Currently underground work will be suspended and to be placed on a care and maintenance starting this summer. Unlike other commodities diamonds have a very selected cliental, people with disposal assets for expensive gemstones. When your bonus has been reduced or eliminated diamonds are the last thing on your shopping list. To the rescue early this year was gold miner Kinross Gold Corp with $104 million US and earning 9% of the HW’s 40% share interest in Diavik. HW stock was a healthy $45 in 2007 and $30 in 2008 and today is $3.70. Let’s hope next time I can provide some good news. |
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