The Vancouver Business Thread

[LeftCoaster]

Penn West to develop B.C shale with help from Japan's Mitsubishi
By Lauren Krugel, The Canadian Press

CALGARY - Penn West Energy Trust is enlisting the help of a major Japanese investor to speed up development of its British Columbia natural gas holdings, marking the latest in a series of similar farm-out deals.

"It is Penn West's view that the joint venture will accelerate the exploration and development of this significant unconventional gas asset," the company said in a release Tuesday.

The Calgary-based oil and gas trust (TSXWT.UN) said it is forming a 50-50 joint venture with a unit of Japan's Mitsubishi Corp. to exploit its northeastern B.C. gas properties.

Earlier this year, Penn West struck a big deal with a Chinese company to help fund development of the trust's oilsands project in the Peace River area of northwestern Alberta.

Tuesday's transaction with Mitsubishi centres on a shale formation in the Cordova Embayment area, as well as conventional producing gas properties in the Wildboy region.

Mitsubishi, Japan's largest general trading company, will commit $850 million to the joint venture — $250 million in cash to acquire a half stake in the assets and $600 million for capital and development funding.

"This agreement is the foundation for a long-term relationship with (Mitsubishi), who has world-wide experience in major project development," Penn West said.

Tuesday's deal is a continuation of a trend that has been taking place south of the border for some time, said Acumen Capital Partners analyst Rob Cooper.

For instance, Oklahoma-based Chesapeake Energy (NYSE:CHK) is working on its Texas shale holdings with French energy giant Total SA. Pioneer Natural Resources (NYSEXD) announced a deal in June with a subsidiary of India's Reliance Industries, also in Texas shale.

The joint ventures give the foreign companies an "attractive entry point" into North American resources, said Cooper.

"If you're to believe natural gas is ultimately going to be the fuel of choice in North America — given it's cleaner and it's abundant at these levels — then that's where you'd want to be," he said.

For the Canadian or U.S. producers, the foreign funds turn what used to be a "hope and a dream" into reality.

"Instead of moving in a much more measured pace, you can get relatively attractive terms and bring a lot of that potential value forward from the future to the present," he said.

UBS Investment Research analyst Matt Donohue said the announcement came as no surprise.

"We like the deal as it does alleviate further debt from (Penn West's) balance sheet while enabling the trust to aggressively develop and focus on its suite of large oil in place assets, while enabling Wildboy to be developed more aggressively," he wrote in a research note.

In June, Penn West announced a $1.25-billion investment from Chinese sovereign wealth fund China Investment Corp. to help develop the trust's Peace River oilsands project.

CIC agreed to buy $435 million worth of Penn West units and invest $817 million in a joint venture at Peace River.

Penn West will hold a 55 per cent interest in the oilsands joint venture and will operate the project, which includes 96,000 hectares of oilsands leases in northern Alberta.

Penn West, known mainly for its vast conventional oil holdings in Western Canada, was unable to pursue that project on its own. As an income trust, a large portion of its cash is funnelled off to investors rather than growth projects.

Natural gas giant Encana Corp. (TSX:ECA) has also proven itself to be a big fan of joint-venture deals. Over the past three years, it has attracted more than $4 billion in third-party capital, and has said it aims to bring in between $1 billion and $2 billion per year in the future.

Encana is working on a deal to team up with China National Petroleum Corp. to develop some of its shale natural gas holdings in northeastern British Columbia.

In March, it signed an agreement with Korea Gas Corp. that saw the Asian company buy a 50 per cent stake in properties in the promising Horn River Basin and Montney shale gas plays in northeastern B.C.

The oilsands are another area where similar joint-ventures work well. For example, Athabasca Oil Sands Corp. (TSX:ATH) got a big boost last year when PetroChina bought a 60 per cent stake in two of its oilsands projects.

"Anywhere where you have a huge capital commitment and you're currently constrained, how do you bring some of that value forward?" Cooper said.

http://www.canadianbusiness.com/mark...ntent=b4292537

[LeftCoaster]

Finavera Renewables signs co-development deals for Irish wind project
By The Canadian Press

VANCOUVER - Finavera Renewables Inc. (TSXV:FVR) has signed a series of agreements for the co-development of the 105-megawatt Cloosh Valley wind project, which has the potential to be a significant source of green electricity for Ireland.

Among the agreements is the sale of a majority interest in Finavera's Gate 3 grid connection to Scottish and Southern Energy for euro8.4 million, or about C$11.4 million.

The Vancouver-based company said Wednesday it has also signed a co-development agreement with SSE and Finavera's current partner Coillte, a state-owned landowner, to jointly develop the Cloosh Valley project.

The project's capacity of 105MW would exceed all current onshore wind farms in Ireland and would provide enough electricity for approximately 68,000 homes, Finavera said.

"We are delighted to be partnering with Scottish and Southern Energy and Coillte on the development of the Cloosh Valley Wind project," said Finavera chief executive Jason Bak.

"SSE brings significant development, construction, and operating experience to this project. The strength of the development team now behind the Cloosh Valley project illustrates the value of this project, which has some of the best available wind resources in Europe. We now have the right team and a clear path to construction and full operation of the Cloosh Valley project."

SSE owns about 11,300MW of electricity generation capacity, with about 2.4 MW from renewable capacity the rest from gas, oil and coal-fired plants.

Coillte is a state owned commercial forestry and renewables company that has been a development partner on the project with Finavera since 2009.

Finavera will retain a 10 per cent equity interest in the project and will participate in all project development functions and activities, the company said.

http://www.canadianbusiness.com/mark...ntent=b4304111

[LeftCoaster]

EuroMax adjourns annual meeting to obtain court guidance on validity of votes
By The Canadian Press

VANCOUVER - EuroMax Resources Ltd. (TSXV:EOX) adjourned its annual meeting before any business could be dealt with in order to seek court guidance on the validity of the proxy votes cast against its director nominees.

Robert Power, chairman of the junior Vancouver-based mineral company, suddenly adjourned the meeting Tuesday to resolve allegations that the integrity of the vote had been compromised.

The meeting will resume Sept. 3 unless EuroMax management seeks directions from the British Columbia Supreme Court and the British Columbia Securities Commission by Sept. 1.

A proxy tabulation determined that 72 per cent of the votes cast, including 10 million votes deemed invalid, were for a slate of director nominees proposed by "concerned" shareholders.

EuroMax's slate received about 26 million votes, compared to 69 million for the dissidents, the opposition shareholders said in a news release.

However, a series of allegations were levelled over moves made prior to the meeting by the concerned shareholders.

Among them was an accusation that shareholders weren't informed that Anthony Patriarco had obtained a stake in EuroMax that exceeded 20 per cent.

EuroMax has sued its former director for insider trading. It has alleged that Patriarco profited from a series of "illegal sales of shares of EuroMax" that drove the company's share price down by 33 per cent.

EuroMax said one of the dissident nominees also allegedly solicited shareholder support before the dissidents' circular was delivered. And the former company CEO solicited proxies from some shareholders without providing information to all shareholders.

The dissident shareholders said they were disappointed that the meeting was adjourned and will "will endeavour to see the fundamental right of all shareholders to vote honoured and the dissident slate elected."

EuroMax was formed in February 2009 following a friendly merger with Silk Road Resources.

http://www.canadianbusiness.com/mark...ntent=b4305523

[LeftCoaster]

Fortune River, Bravada to form merged mining company focused on Nevada
By The Canadian Press

VANCOUVER - Bravada Gold Corp. (TSXV:BVA) and Fortune River Resource Corp. (TSXV:FRX), which have a common director who is president of both companies, say they plan to create a new corporation that will combine the assets of both miners.

Joe Kizis will continue to be president of the new company, which will retain the Bravada name.

The amalgamation agreement, which has been approved unanimously by the two companies' boards, is subject to shareholder approval. The companies plan for special meetings in October.

"We believe that the amalgamated company will be stronger than the two amalgamating companies would be separately," Kizis said in an announcement Wednesday.

Fortune River shareholders will receive one share of the new company in exchange for two FRX shares, while shares of Bravada will be exchanged on a one-for-one basis.

Fortune River brings its Wind Mountain property, which has an estimated 406,000 ounces of gold and the East Manhattan property. Bravada has funds to acquire additional exploration and acquisition properties in the Battle Mount

Fortune River shares traded Wednesday at six cents, up half a cent, on the TSX Venture Exchange. Bravada share dropped one cent to 13 cents.

http://www.canadianbusiness.com/mark...ntent=b4306617

[LeftCoaster]

Mesa Uranium to acquire Pine Valley potash project in Utah for $242,000
By The Canadian Press

VANCOUVER - Mesa Uranium Corp. (TSXV:MSA) says it has signed an agreement to acquire the Pine Valley potash project in Utah for $242,000.

The Vancouver-based junior miner said Wednesday the project is thought to have the capacity to support an operation with annual production of 94,000 tonnes of potash, 181,000 tonnes of alunima and 167,000 tonnes of sulphuric acid for more than 25 years.

Mesa will pay the unnamed owner $25,000 upon signing of a definitive agreement, another $25,000 and 800,000 shares in Mesa on Jan. 1, 2011 and payments of $10,000 annually after that.

Shares in Mesa climbed 2.5 cents or 11.6 per cent to 24 cents in afternoon trading on the TSX Venture Exchange.

http://www.canadianbusiness.com/mark...ntent=b4307168

[LeftCoaster]

Huldra Silver stock jumps to two-year high after assay results released
By The Canadian Press

VANCOUVER - Huldra Silver Inc. (TSXV:HDA) shares jumped to their highest level in more than a year Wednesday after the junior mining company released assay results from samples taken at the company's Treasure Mountain property in British Columbia.

The samples were taken Aug. 17 and 18 by independent professional geologist Erik Ostensoe and technician Daniel Almeida and analysed at the Eco Tech Laboratory in Kamloops, B.C., the Vancouver-based company said.

One of the samples, from a previously known but untested zone of the property, indicated a remarkable 9,221 grams per tonne of silver.

Huldra shares were up 13 cents or 35 per cent from the previous close, late in Wednesday's session at the TSX Venture Exchange. Earlier, the stock had been as high as 59 cents, the highest since August 2008.

http://www.canadianbusiness.com/mark...ntent=b4308985

[LeftCoaster]

Platinum Group plans $20.4-million property acquisition in South Africa
By The Canadian Press

VANCOUVER - Platinum Group Metals Ltd. (TSXTM) has taken out an option to purchase a large area of surface rights and housing facilities in the area of its planned Project 1 platinum mine in South Africa in a deal worth more than $20 million.

The Vancouver-based miner said it has paid an initial $1.85 million for the right to purchase the property, with the balance of $18.6 million due within one year upon the grant of mining authorization.

The company can extend the due date for a further year for a second $1.85-million payment against the purchase price.

The property covers 1,713 hectares and includes significant surface facilities, including about 350 chalets, bungalows, flats and hotel rooms capable of accommodating more than 1,000 people.

These facilities are planned to become part of the Project 1 construction and worker's accommodation as well as administration infrastructure, the company said in a news release.

"This purchase agreement advances Platinum Group's position and is an important addition to the strength of the company's strategic position in the area," it said.

"When combined with the company's existing surface rights holdings, the combined land position will be approximately 2,655 hectares covering all of the functional areas of Project 1 and also covering approximately 581 hectares overlying the western portion of the Styldrift project area operated by ... Royal Bafokeng and Anglo Platinum," it said.

Meanwhile, the company said it has recently made other "important advancements" on the project, including a deposit of $1.24 million to Eskom, the South African power utility, to advance engineering for the delivery of construction power and commercial production power to Project 1.

"An allocation for construction power has been made and the company is formally in process for delivery of production power," it said. "The company is also in communication with the local water authority and is moving toward a detailed program for delivery of production water."

Platinum Group Metals shares were unchanged at $1.80 in midday trading Thursday on the Toronto Stock Exchange.

http://www.canadianbusiness.com/mark...ntent=b4317148

[LeftCoaster]

British Columbia government oil and gas asset sales hit $98 Million
By The Canadian Press

VICTORIA - The British Columbia government says its August natural gas and petroleum sale raked in a higher-than-expected $98 million in bonus bids for leases and drilling licences in the province.

So far this year, a total of $760 million worth have been sold this year, the province said in a release.

"This sale, like others this year, is larger than predicted and is more evidence of the confidence the international investment community has in British Columbia's natural gas and petroleum resources," said Energy, Mines and Petroleum Resources Minister Bill Bennett.

"This confidence, matched with our rich resources, is powering our economic recovery, creating good jobs for families and revenues for government."

The sale on Aug. 25 sale offered 81 parcels in northeast B.C., covering 34,349 hectares, and sold 68 parcels covering 31,052 hectares. The average price per hectare was $3,160.

Included in the sale were two drilling licences in the Kiwigana River area, 70 kilometres northwest of Fort Nelson, with bids of $5,780 and $9,859 per hectare for a total of more than $64 million, plus 22 leases in the Blueberry area 80 kilometres northwest of Fort St. John, with bids ranging between $2,566 and $5,137 per hectare for a total of over $27 million.

Drilling licences provide the exclusive right to explore for natural gas by drilling wells and leases provide rights to produce natural gas and petroleum.

The next sale is scheduled for Sept. 22.

http://www.canadianbusiness.com/mark...ntent=b4319498

[LeftCoaster]

Sierra Q2 loss grows to $912,636 from $642,400
By The Canadian Press

VANCOUVER - Sierra Geothermal Power Corp. (TSXV:SRA), an alternative energy power producer, reports its second quarter net loss grew to $912,636 from $642,400 for the same year-earlier period.

The per-share loss was one cent for both periods, Sierra said Thursday.

Sierra is a Vancouver-based geothermal energy company focused on the exploration and development of clean, sustainable power in western North America.

The company has full control over its 48,000-hectare portfolio of geothermal properties in Nevada, California and British Columbia. Those projects have a combined total estimated capacity of almost 400 megawatts of electricity.

http://www.canadianbusiness.com/mark...ntent=b4319959

[LeftCoaster]

B.C., Fortis to go ahead with $900-million Waneta hydroelectric project
By The Canadian Press

CASTLEGAR, B.C. - Canada's largest private-sector power company plans to build a $900-million hydroelectric plant in southern British Columbia with two provincial agencies as partners.

Fortis Inc. of St. John's, N.L., (TSX:FTS) will own 51 per cent of the hydro plant, known as the Waneta Expansion, which will supply BC Hydro and FortisBC, the electricity provider for the Southern Interior.

The project near Trail, B.C., is being led by Fortis in partnership with the B.C. government-owned Columbia Power Corporation and Columbia Basin Trust.

The project will bring about 400 jobs and $200 million in wages and benefits to the region, according to B.C. Energy Minister Bill Bennett, who represents a riding in the region.

"This is a good, cost-effective way to generate electricity," he said in an interview.

"We've got this capacity, this water going over the existing dam that no one is currently paying for, no one is currently renting. . . It was an unexploited opportunity. It's been on the drawing board for several years."

Other companies interested in the project will have until Sept. 13 to submit alternatives to the Fortis plan, through BC Bid. (www.bcbid.gov.bc.ca).

Montreal-based engineering and construction services giant SNC Lavalin (TSX:SNC) was chosen as the preferred candidate to be the project's contractor in May 2009.

At the time, Waneta Expansion Power Corp. — a subsidiary of Columbia Power Corporation and Columbia Basin Trust — said construction could begin as early as last fall

But the project was put on hold in November, when the provincial agencies announced the power plant plan had to be restructured.

They said Thursday that SNC Lavalin continues to be the preferred construction contractor.

Fortis, which owns Newfoundland Power and a other utilities in Ontario, British Columbia, Alberta and P.E.I., said that each of the expansion project's partners will be responsible for funding their portion of the cost.

"Fortis is excited about this opportunity to grow our non-regulated hydroelectric generation business in British Columbia," Fortis president and CEO Stan Marshall said in a statement.

Among Fortis' customers are people in the Okanagan, where searing hot summer temperatures mean few live without air conditioning.

"You've got all this demand in the summer time and you have to be able to meet that demand, your customers need it," Bennett said.

"What Fortis is doing is coming and saying we'll put in a new generating station, we'll use that water that's coming over the dam that no one is paying for right now. . .but we'll also keep this capacity in reserve for the summer time when we really need to boost our electricity output."

The Waneta Expansion project is envisioned as a second powerhouse located at the Waneta Dam near Trail, B.C.. The current plant supplies power to the zinc smelter operation owned by Teck Resources (TSX:TCK.B), with surplus power sold.

In 1994, B.C. acquired expansion rights to the Waneta Dam from Teck. They were then transferred to Columbia Power, a Crown corporation with a mandate to invest in clean and renewable power projects in conjunction with the trust.

Last year, Teck sold a one-third interest in the Waneta Dam to BC Hydro, another provincial Crown corporation, for $825 million. That move was part of Teck's efforts to reduce debt.

The expansion project is expected to generate 335 megawatts. That compares to the 900 megawatts that would be generated by the proposed Site C hydroelectric megaproject.

The province has announced it is taking the next steps on the road to getting Site C toward an environmental assessment, but if a dam is to be built, it will be years away.

Bennett said the Waneta project and Site C and all the other independent power projects combined in the province won't guarantee B.C. energy self-sufficiency.

"(If) you put it all together, do we achieve self-sufficiency. And the answer is maybe, but just barely."

http://www.canadianbusiness.com/mark...ntent=b4317286

[LeftCoaster]

Richard Hopp appointed president and CEO of Run of River Power
By The Canadian Press

VANCOUVER - Run of River Power Inc. (TSXV:ROR) has appointed board member Richard Hopp as president and chief executive of the Vancouver-based hydroelectric power company.

Hopp had been an independent director since his appointment in April 2006.

"His proven track record in global renewable power generation and close relationship with ROR Power make him the ideal candidate to lead the company to the next level," William Hardwick, the company's chairman, said in a release Friday.

Hopp has over 30 years of experience in the energy marketing and power development sectors.

Run of River Power operates a hydroelectric power generation station at Brandywine Creek, near Whistler, B.C. and is developing other projects.

http://www.canadianbusiness.com/mark...ntent=b4325610

[LeftCoaster]

TAG Oil Ltd. rebounds to profit in first quarter 2011, doubles revenues
By The Canadian Press

VANCOUVER - Junior oil and gas explorer TAG Oil Ltd. (TSXV:TAO) said Monday it rebounded to profit in its first quarter of 2011 and more than doubled revenue from a year ago.

The Vancouver-based company says it earned $119,439, or nil per share, in its first quarter of fiscal 2011.

The results marked a recovery from a loss of $170,055, or a penny per share at the same time last year.

Revenue was $1.8 million, more than double its $588,818 in sales last year.

The company owns a number of interests in New Zealand.

http://www.canadianbusiness.com/mark...ntent=b4354915

[LeftCoaster]

Fronteer Gold to acquire AuEx Ventures in cash, share arrangement worth $280.8M
By The Canadian Press

VANCOUVER - Fronteer Gold (TSX:FRG) says it has agreed to acquire AuEx Ventures Inc. (TSX:XAU) in cash and share arrangement valued at $280.8 million that consolidates ownership in a promising Nevada project.

The Vancouver-based miner said Monday that AuEx shareholders will receive 0.645 of a Fronteer Gold share, 66 cents in cash and half a share in a new exploration company formed as part of the agreement.

Fronteer Gold owns and operates 51 per cent of Long Canyon, an advanced-stage exploration project in Nevada, and will obtain the remaining 49 per cent in Long Canyon's regional Pequops district.

The new company formed as part of the agreement would own all of AuEx's assets separate from its Pequops property, Fronteer said.

"We've been looking extensively at acquisitions for a couple of years now and there's simply no other project out there that we like more than Long Canyon," Fronteer president and CEO Mark O'Dea told analysts in a conference call.

"We have a great appreciation for its high quality attributes and we have a large degree of confidence in its upside potential."

The acquisition price — excluding the shares of the new exploration firm — represent a 50.9 per cent premium on the volume-weighted average prices of AuEx and Fronteer Gold shares on the Toronto Stock Exchange for the 20 trading days ended Aug. 26.

AuEx's board of directors have unanimously approved the agreement and its directors and senior officers are expected to vote in favour as well. Fronteer Gold's board unanimously approved the transaction.

"The transaction provides just an excellent premium to our shareholders while at the same time delivering future upside potential through the ongoing exposure to Fronteer," added AuEx president and CEO Ron Parratt.

Fronteer shares were down 3.7 per cent, or 31 cents, at $8.08 on the Toronto Stock Exchange while AuEx's stock lifted nearly 31 per cent, or $1.39, to $5.89 in morning trading Monday.

http://www.canadianbusiness.com/mark...ntent=b4354135

[LeftCoaster]

First Quantum Minerals says DRC revocation of mine titles will damage country
By The Canadian Press

VANCOUVER - First Quantum Minerals Ltd. says a decision by the Democratic Republic of Congo to revoke the Canadian company's mine titles will deter international investors from the Central African country.

"It's a pretty unfortunate development," First Quantum (TSX:FM) chief executive Philip Pascall said on a conference call held Monday to discuss its decision to suspend operations in the country.

The Vancouver-based copper and gold miner is considering international arbitration against the DRC government after it was alerted that a state-run miner would take over titles at its Frontier mine.

"The fragile foreign investment environment is severely damaged and likely to remain so for some time without remedial action," Pascall said.

"The impact on the community and the province and country is not trivial. Frontier has been employing 1,500 people and each of these employees has ten dependents or so, and so the impact is pretty widespread."

First Quantum said it received a letter from Sodimico, the state-owned mining company, Friday stating that it has been granted Frontier's titles and demanding that First Quantum stop all mining and exports and leave the mine area, in the Katanga region of the DRC.

"We believe there's no legal basis for the withdraw of frontiers exploration permits," Pascall said.

"The fact is that Sodimico never held the titles to be withdrawn."

First Quantum says it discovered both the Lonshi and Frontier copper mines in the Katanga region.

The mining exploration rights for the Katanga region were owned by Sodimico until 2000, when they were revoked by the government and purchased by First Quantum. A May ruling by the Supreme Court of the DRC found that First Quantum's permits for the Lonshi and Frontier copper mines were awarded illegally and should revert to the state-owned company.

The company has suspended all operations in the country and said for "obvious reasons" it will not pursue remedies through the DRC legal system.

First Quantum maintains that the withdrawal of its exploration permits contravenes the country's mining law and considers it an illegal expropriation of property.

The company believes the action was retribution for its decision to go to international arbitration over what it deemed an illegal move by the DRC to stop construction of its Kolwezi copper and cobalt project last September.

The government has since awarded the Kolwezi project to a London-based mining company, despite two procedural orders from the International Chamber of Commerce prohibiting the transfer of the permit.

Pascall said he hopes the government will reconsider because the country needs reputable investors like First Quantum and the tax opportunities that they provide. He said the company is willing to be patient and hopes it can reach a fair settlement with the government.

However, he said there are also many employment opportunities within the company for the displaced staff from the DRC.

Besides Lonshi and Frontier, First Quantum also owns mines and projects in Zambia, Mauritania, Australia and Finland.

"We hope that in time the government will realize that we are a responsible corporate citizen and that we make a substantial contribution to their society and treasury," Pascall said.

Shares in the company gained $2.73 or 4.65 per cent to $61.41 in midday trading Monday on the Toronto Stock Exchange.

http://www.canadianbusiness.com/mark...ntent=b4355660

[LeftCoaster]

True North Gems options Yukon nickel property to Endurance Gold
By The Canadian Press

VANCOUVER - True North Gems (TSXV:TGX), a junior Vancouver miner, says it has granted Endurance Gold Corp. (TSXV:EDG) an option to acquire up to a 75 per cent working interest in the Bandito nickel, copper property in the Yukon.

Under terms of a deal announced Monday, Endurance can earn an initial 51 per cent joint venture interest in the Bandito property by paying C$125,000 by the end of 2012 and completing C$1 million in exploration by the end of 2013

Endurance can acquire another 24 per cent by issuing 200,000 shares of Endurance to True North and spending another $1 million on exploration.

http://www.canadianbusiness.com/mark...ntent=b4356698

[LeftCoaster]

China Gold acquires copper property in Tibet for US$742 million in stock
By The Canadian Press

VANCOUVER - China Gold International Resources Corp. Ltd. (TSX:CGG) said Monday it has signed a deal to buy a copper property in Tibet from a subsidiary of its own biggest shareholder in an all-stock deal valued at US$742.3 million.

The move is part of a plan by China's biggest gold company to establish China Gold International as a global miner.

The Vancouver-headquartered company, which trades on the TSX, said it will issue 170.3 million common shares at a deemed price of US$4.36 per share for 100 per cent of Skyland Mining Ltd.

Skyland's chief asset is the Jiama copper property in Metrorkongka County, Tibet. — a deposit that is being developed into a combined open-pit and underground mining operation.

The purchase includes assumption of shareholder loans of US$42.3 million made by the vendors, Rapid Result Investments Ltd. and a Hong Kong subsidiary of China National Gold Group Corp., which is owned by the Chinese government.

China National, that country's largest gold producer with an annual output of 89 tonnes, is also the largest shareholder in TSX-listed China Gold International.

The acquisition of Skyland represents "the first significant step" by China National to establish the Vancouver miner "as its international flagship company," company chairman Zhaoxue Sun said in a news release.

"As part of the transaction, it is contemplated that the China National Gold Group will grant to the company a non-compete undertaking in which the company will be entitled to any and all mineral property opportunities sourced by China National Gold," the news release added.

China International, meanwhile, would agree not to acquire further gold and non-iron mineral properties in the China.

Completion of the transaction is subject to a number of conditions, including approval from disinterested shareholders, the completion of the Vancouver company's listing on the Hong Kong stock exchange and regulatory approvals.

A special meeting of shareholders to approve the transaction is expected to be held in October, with closing expected in November.

China Gold International shares were down 19 cents, or 3.86 per cent, at $4.73 in trading Monday on the Toronto Stock Exchange.

http://www.canadianbusiness.com/mark...ntent=b4355824

This one seems very strange to me, quite a large deal for what appears to be a relatively small Vancouver miner. When I looked into it, the firm shares the exact same address in the World Trade Centre as Ivanhoe Mines, who sold a mine in china to China National Gold, which owns 42% of China Gold International resources, which owns the mine Ivanhoe sold to China National.

Ivanhoe is too big a company to be sharing an office, and neither board shares a member, so I dont quite understand what the arrangement is here.

Seems like a shell company set up by China National, but still, why would a Chinese state owned firm share an office with a relatively large Vancouver based gold miner?

Very strange.

Anyone have any insight?

[LeftCoaster]

Eacom Timber quarterly losses deepen to $2.5 million as sales weaken
By The Canadian Press

VANCOUVER - Eacom Timber Corp. (TSXV:ETR) says its quarterly losses deepened to $2.5 million on higher costs related to its acquisition of Domtar's wood business

The company said the results were equal to a loss of three cents per share for the three months ended June 30.

The results compared to a loss of $205,000, or a penny per share, a year ago.

In the period Eacom booked higher losses mostly tied to bigger professional and due diligence fees, travel expenses and Big River Sawmill holding costs.

During the quarter, the company acquired Domtar Corp.'s (TSX:UFS) forest products business in a cash and stock deal worth more than $80 million. The acquisition was completed on the final day of the quater so the results do not include the forest products business.

Quarterly sales tumbled to $504,000 from $1.1 million.

http://www.canadianbusiness.com/mark...ntent=b4363533

[LeftCoaster]

IND DairyTech reports Q2 profit of $3.2M; investments offset operating loss
By The Canadian Press

VANCOUVER - IND DairyTech Ltd. (TSXV:IND) credits investment gains for putting the milk producer in the black in the second quarter despite an operating loss blamed on the cost of dealing with an outbreak of foot-and-mouth disease.

The Vancouver-based dairy operator said it made $3.2 million or three cents per share compared in the quarter ended June 30, compared with a loss of $1.7 million in the second quarter of 2009. The loss per share in the prior-year quarter was not disclosed in a company news release.

Revenue was $7.9 million compared with $1.2 million in the second quarter of 2009.

IND said it suffered an operating loss of $1.2 million in the quarter, mainly due to a $1-million loss from the disposal of diseased cows but was able to report a profit overall "mainly due to gains on its investing activities."

"The company is still facing ... challenges due to disease as milk production in some farms ... (is) still affected," said chairman and CEO Jesse Zhu.

"However, we have seen the impact of the disease fading. Management has been making efforts to control and reduce the loss. In the coming quarters, after the disease (is) gone, we expect to see a positive operating income."

Meanwhile, Zhu said the company's net income in the quarter reflected management's successful efforts in creating value for the shareholders and expanding the company through business combinations.

IND also announced Tuesday that Paul Haber and Guangyi Xu had resigned as directors and that James Xiang would be stepping down as vice-president, corporate finance, in two months.

The company's shares last traded Aug. 27 at 31 cents on the TSX Venture market.

http://www.canadianbusiness.com/mark...ntent=b4364658

[LeftCoaster]

And from the story that never ends:

Investor Carl Icahn raises bid for film studio Lions Gate to $7.50 per share
By The Associated Press

NEW YORK, N.Y. - Activist investor Carl Icahn raised his bid for Vancouver-based film studio Lions Gate Entertainment Corp. (NYSE:LGF) on Tuesday, driving its shares to a new yearly high.

Icahn, who has been tussling with the studio's management for more than a year, said he is now offering US$7.50 per share, up from $6.50. The move comes after he lowered his bid by 50 cents to $6.50 in July but failed to win over more Lions Gate investors.

Lions Gate shares jumped 88 cents, or 14 per cent, in morning trading to US$7.37 after setting a new annual high of $7.40.

Icahn said his new offer will only be valid if the extra shares that the company recently issued to Lions Gate director Mark Rachesky are rescinded or converted into non-voting stock.

Lions Gate, which has resisted Icahn's takeover effort, did a debt-for-equity swap in July in a bid to dilute his stake in the company. It issued 16.2 million new common shares to Rachesky, boosting his stake to 28.9 per cent, while diluting Icahn's stake to 33.5 per cent from 37.9 per cent.

Icahn has asked the Supreme Court of British Columbia to reverse the swap.

The company said in a statement Tuesday that it will decide "promptly" whether to recommend that shareholders accept Icahn's latest offer.

Although based in Canada, Lions Gate operates out of Santa Monica, Calif., and is known for high-profile films like the "Saw'' horror franchise and the TV series "Mad Men."

Its most recent releases include "The Expendables" and "The Last Exorcism." And it was also behind the Oscar-nominated movie "Precious: Based on the Novel 'Push' By Sapphire."

Icahn has accused Lions Gate is suing Lions Gate Entertainment Corp., alleging it used ``scorched earth tactics'' in an effort to prevent him from taking over the film company.

http://www.canadianbusiness.com/mark...ntent=b4365341

[LeftCoaster]

Kodiak Exploration to acquire Golden Goose Resources in stock deal
By The Canadian Press

VANCOUVER - Kodiak Exploration Ltd. (TSXV:KXL) said Tuesday it plans to acquire Golden Goose Resources Inc. (TSXV:GGR), whose main asset is a gold property in Ontario, in an all stock deal.

Terms of the takeover where not disclosed, but based on its share price range Tuesday morning of between 25 and 26.5 cents, Golden Goose had a market value of between $12.8 million and $13.6 million.

Trading in shares of both companies were halted pending the announcement. Kodiak shares later rose two cents, or 10.53 per cent, to 21 cents at midday on the TSX Venture market.

http://www.canadianbusiness.com/mark...ntent=b4365687