The Vancouver Business Thread

[LeftCoaster]

Hey, beat me too it, I was going to post that exact article. nice to have someone else posting in this thread though!

Ontario court approves specialty paper unit sale by Fraser Papers
By The Canadian Press

TORONTO - The Ontario Superior Court has approved the sale of the specialty papers business of Fraser Papers Inc., which has been operating under court protection from creditors.

Under the terms of the sale, the creditors of Fraser Papers will receive promissory notes and a 49 per cent equity interest in the purchaser, Twin Rivers.

Brookfield Asset Management Inc. (TSX:BAM.A), a secured creditor, has agreed to convert its claim against the company into a 51 per cent stake in Twin Rivers, while the New Brunswick government has agreed to convert its $35-million secured loan and accrued interest into preferred shares.

The deal is expect to close within the next few weeks.

Fraser Papers also said Wednesday that the court overseeing its restructuring has extended the company's creditor protection to July 9.

Last month, Fortress Paper Ltd. signed an agreement to acquire a manufacturing facility in Thurso, Que., from Fraser Papers for $3 million.

Vancouver-based Fortress (TSX:FTP), which produces specialty paper, said it intends to spend approximately $153 million to convert the plant into a specialty cellulose operation once the acquisition is complete.

Fraser Papers is an integrated specialty paper company with operations in New Brunswick, Maine, New Hampshire and Quebec.

http://www.canadianbusiness.com/mark...ent=b072095120

[LeftCoaster]

Huntingdon REIT's Q4 loss narrows to five cents per unit despite lower revenue
By The Canadian Press

RICHMOND, B.C. - Huntingdon Real Estate Investment Trust said Wednesday its fourth-quarter loss from continuing operations narrowed to five cents per unit compared with a loss of six cents per unit in the same period last year.

The trust, which owns interest in a diversified portfolio of commercial properties, had rental revenue from continuing operations of $13.7 million for the period ended Dec. 31. That's down from $14.9 million in 2008.

Funds from operations, a widely-used measure of the financial health of publicly traded real estate companies, was negative $200,000 compared with income of $600,000 a year ago.

The REIT only provided per unit data for the quarter and full year.

At year end, Huntingdon REIT (TSX:HNT.UN) lost 13 cents per unit versus 10 cents per unit in fiscal 2008. Huntingdon attributed the increased loss in fiscal 2009 to higher operating costs and a reduction in income tax recovery.

Its rental revenue slipped to $58 million from $59 million.

As at the end of last year, about 83 per cent of Huntingdon's portfolio was leased. That's down 1,000 basis points at the end of the previous year due to higher vacancy at various Ontario retail and industrial properties.

During afternoon trading on the Toronto Stock Exchange, Huntingdon REIT's units were unchanged at $5.80.

http://www.canadianbusiness.com/mark...ent=b072499622

[LeftCoaster]

Mercator gets extension on Mineral Park guarantee; shares soar on TSX
By The Canadian Press

VANCOUVER, B.C. - Shares of Mercator Minerals Ltd. (TSX:ML) soared in heavy trading on the Toronto Stock Exchange on Wednesday after the company announced it had been granted a one-year extension to satisfy the completion guarantee at its Mineral Park mine in Arizona.

The extension, granted by Silver Wheaton (Caymans) Ltd., a subsidiary of Silver Wheaton Corp. (TSX:SLW), gives Mercator until June 30, 2011, to meet the mill throughput requirements of an average 35,000 tons per day for 30 consecutive days.

Meanwhile, Mercator also said it has granted Silver Wheaton (Caymans) Ltd. a right of first refusal on any future silver stream transaction or royalty interest on silver produced from mining properties or concessions owned or leased by the Mercator its affiliates.

The two companies signed an agreement two years ago under which Mercator agreed to transfer to Silver Wheaton all the silver from Mineral Park mine for $3.90 an ounce in exchange for an upfront payment of US$42 million to fund expansion of the mine.

"We value our partnership with Silver Wheaton and we appreciate their continued support of the Mineral Park mine," Mercator president and CEO Mike Surratt said Wednesday in a news release.

"We look forward to expanding our business relationship with this leading silver stream company."

The 100 per cent owned Mineral Park mine is Mercator's principal asset. It shares were up 23 cents or 10.5 per cent at $2.42 in early afternoon trading on the TSX that saw more than 5.5 million shares change hands.

Silver Wheaton Corp. stock was up 52 cents or three per cent at $17.50 on almost 900,000 shares.

http://www.canadianbusiness.com/mark...ent=b074910728

[LeftCoaster]

Rye Patch shares drop 30 per cent after Centerra property purchase is pre-empted
By The Canadian Press

VANCOUVER, B.C. - Shares of Rye Patch Gold Corp. tumbled more than 30 per cent on Friday morning after the junior miner disclosed that another company pre-empted its agreement to purchase a property stake from Centerra Gold.

Rye Patch (TSXV:RPM) shares were off 11 cents to 23 cents on the TSX Venture Exchange after its stock resumed trading early Friday.

After the closing bell on Thursday, the company confirmed that Centerra (TSX:CG) has sold its stake in a Nevada gold property to California company Homestake Mining Co., after that company exercised its right of first refusal to acquire Centerra's 63 per cent stake in the Ren property.

Rye Patch had made an agreement to buy the property interest, but it was conditional on Homestake waiving its pre-emptive right to the property.

Rye Patch said it is now entitled to a break fee of US$250,000 from Centerra.

Centerra shares were up 11 cents to $11.46 on the Toronto Stock Exchange.

http://www.canadianbusiness.com/mark...ent=b091108616

[LeftCoaster]

Search Minerals 'very excited' by rare earth element discovery in Labrador
By The Canadian Press

VANCOUVER, B.C. - Search Minerals Inc. (TSXV:SMY) said Wednesday it was "very excited" by the results of an airborne survey for rare earth elements in southeastern Labrador.

Radiometric and magnetometer surveys have outlined at least 80 rare earth element targets in the Port Hope Simpson district, the company said in a news release.

"Very preliminary prospecting and sampling of a few of the REE (rare earth element) targets in the PHS district indicate that this district is highly prospective for Zr, Y, Nb and U as well as REEs," it said.

The company, whose shares were halted in trading on the TSX Venture market pending an announcement, said it recently staked additional claims in the district creating a belt approximately 120 kilometres long and four-to 10-kilometres wide in the PHS district.

Search Minerals shares last traded Tuesday at 50 cents on the Venture market.

Search, through its wholly owned subsidiary, Alterra Resources Inc., now controls 58 licences in the area comprised of 11 licences acquired in an agreement with B and A Minerals Ltd. and 47 additional map-staked licences for a total of 3,456 claims covering 864 square kilometres.

"We were very excited about the initial REE discovery on the B and A claims," Search Minerals president Jim Clucas said.

"As a result of significant additional staking, our land package has grown to the point where we believe we have identified and control the largest new district for REE potential in North America."

Search plans to spend about $1 million on follow-up mapping, sampling and prospecting of the higher priority targets this spring and summer, leading to drill targets by late summer, it said.

http://www.canadianbusiness.com/mark...ent=b142629622

[LeftCoaster]

Pan American Silver reports gold and silver production up from year ago
By The Canadian Press

VANCOUVER, B.C. - Pan American Silver Corp. (TSXAA) said Monday that silver production in its first quarter totalled 5.5 million ounces, up 13 per cent from a year ago.

Gold production was 27,896 ounces, up 34 per cent.

Pan American said it expects to achieve its full year silver production forecast of 23.4 million ounces.

The company said its Huaron mine will be hurt by the difficult ground conditions, but better than anticipated ore grades at its Alamo Dorado and San Vicente mines are expected to offset the shortfall.

Shares in Pan American, which reported its results after the close of markets, were up 15 cents at $25.37 on the Toronto Stock Exchange.

http://www.canadianbusiness.com/mark...ent=b193560025

[LeftCoaster]

To Vancouver and beyond: Buzz Lightyear ushers in Pixar's first Canadian studio
By Tamsyn Burgmann, The Canadian Press

VANCOUVER, B.C. - When Buzz Lightyear visits Vancouver, he strolls through the old-growth forest of Stanley Park, while his buddy Woody checks out the park's grove of totem poles.

Lightening McQueen races along the seawall and past glimmering glass of towering condos, while Wall-E takes in a glorious sunset over the Inukshuk at the beach.

Creators of the well-loved characters from California's Pixar Animation Studios are embarking on an adventure north of the border by opening its first Canadian studio, even despite a strong Loonie that's knocking the knees of American investors.

"Interestingly enough, we have a very long-term approach, we are very methodical and deliberate organization," Amir Nasrabadi, Pixar Canada's general manager, said Tuesday after showing a gag video featuring the popular computer-generated characters visiting city landmarks.

"Fluctuations in foreign currency, while they can be significant, will not alter our plans."

Pixar Canada won't make feature-length films. Instead, they will produce short cartoons by further animating the worlds of the blockbuster hits Toy Story and Cars. The variety of new creations, not set in Vancouver but in their respective imaginary towns, will appear on the Disney Channel and network TV, online and at theme parks.

Managers are aiming to staff the open-concept office - which features spectacular views of trains, tugboats and float planes passing through Vancouver's harbour - with 75 employees by December 2011.

Academy Award-winning Pixar, which is nearing 25 years in the business, was attracted to Vancouver for several reasons, Nasrabadi said.

Talent is available in droves thanks to an abundance of universities and colleges in the area, which is in the same time zone as San Francisco Bay, where Pixar has its headquarters.

Plus, British Columbia offers a competitive tax regime.

"The federal government, and especially the provincial government, has been incredibly strong in terms of supporting and strengthening the film and production tax incentives, making this a very cost-effective place to do business," Nasrabadi said.

Premier Gordon Campbell, who attended the opening, said the film industry comprises about one to two per cent of British Columbia's economy.

"(There are) indirect benefits that come from developing a strong creative industry," he told reporters.

"As we move into the future, I think for Canada, not just British Columbia, we're going to have to be more innovative."

New employee Behzad Mansoori-Dara, who is a layout artist, said he's thrilled to be working on projects related to films he watched while growing up.

"I still remember when Toy Story was coming into the theatres and I went and bought my tickets people said, 'That looks kind of weird, that C-G thing,"' he said of the world's first fully computer generated feature film, released in 1995.

"It's really awesome to be a part of that legacy, to just kind of feel that history of where it's coming from and to be a part of the projects that originated all of this."

His co-worker Julie Pantoja, an apprentice artist, says she's looking forward to injecting some Canadian flavour into the animations.

"We'll try to put in a Canucks' jersey somewhere in the background," she joked.

Pixar releases Toy Story 3, its 11th feature film, in June.

http://www.canadianbusiness.com/mark...4705428&page=2

[LeftCoaster]

Teck Resources to pay off $9.8 billion loan Thursday, faster than expected
By The Canadian Press

TORONTO - Teck Resources Ltd. (TSX:TCK.B) says it will make a final debt repayment on Thursday for the $9.8 billion loan it took to acquire the assets of Fording Coal Trust.

Chief executive Don Lindsay told analysts on a conference call that Teck plans to pay off the outstanding $417 million on the 2008 loan faster than it initially expected.

He says that has increased Teck's investment rating with some of the world's biggest rating firms and has freed up cash for reinvestment in the company.

However, he also said that the Vancouver-based mining company is not planning any immediate acquisitions, despite the freer cash flow.

Teck has reduced its total debt by $8.1 billion in 18 months.

Late Tuesday, the company reported profits of $937 million in the first quarter, helped by higher revenue and asset sales.

http://www.canadianbusiness.com/mark...ent=b212399221

[LeftCoaster]

Great Basin Gold selling up to 50,000 tons of Nevada ore to Newmont Mining
By The Canadian Press

VANCOUVER, B.C. - Great Basin Gold Ltd. (TSX:GBG) announced Wednesday it has agreed to sell ore stockpiled at its Hollister property in Nevada to Newmont Mining Ltd. (TSX:NMC) for processing.

Under the deal calling for the sale of up to 50,000 tons and not less than 35,000 tons, Newmont Mining will settle 75 per cent of the estimated value of the ore within five days after delivery at a fixed metal price of US$1,000 per ounce for gold and US$17 per ounce for silver.

The outstanding amount will be settled once all metal has been crushed and final assays received, Great Basin said in a news release.

Great Basin said it expects to recover approximately 28,000 gold equivalent ounces, with estimated net proceeds of US$26.3 million under the agreement.

Toronto-based Newmont operates in North and South America, Indonesia, Africa, Australia and New Zealand. Its shares were up 61 cents at $52.12 in midday trading Wednesday on the Toronto Stock Exchange. Shares of Vancouver-based Great Basin were up 10 cents at $1.78.

http://www.canadianbusiness.com/mark...ent=b212220121

[LeftCoaster]

More good news for Teck. After the catastrophic last few years, following some really bad luck making a high risk manouver right before the financial collapse Teck has managed to squeek through and now appear stronger then before.

Look for their bond ratings to continue to rise past the immanent adjustment, as Teck benefits from rising comodity prices and a stable capital structure. I would also be surprised to see Teck involved in any major aquisitions in the near future, this recent experience has likely made them somwhat gunshy.

Teck Resources to make loan payment Thursday, makes dividend a high priority
By Sunny Freeman , The Canadian Press

Teck Resources Ltd. (TSX:TCK.B) says it will make reinstating its dividend a high priority after it makes a final debt payment this week on a $9.8-billion loan it took out to acquire the Fording Coal Trust in 2008.

The company will make the $417-million loan payment on Thursday - closing out one of the stormiest chapters of the company's history - putting Teck back on the solid footing it held before the recession.

"We have hit the debt reduction target that we originally put in place in July of 2008 and we've hit it much faster than we originally planned, in spite of this severe economic recession that we've been through," Teck CEO Don Lindsay told a conference call Wednesday.

"We do have significant growth projects down the road...but they may not require capital for some time, probably not until 2012 at the earliest. So we have at least two full years of very significant surplus cash flow," said Lindsay, who added that Teck intends to make reinstating its dividend a high priority.

Teck suspended its dividend in November 2008, a move that saved the company $486 million a year. The company had paid a semi-annual dividend of 50 cents per share.

The Fording acquisition and the debt taken on to finance the deal were a near fatal mistake for Teck as the recession set in, commodity markets crashed and credit availability seized.

Since then, the Vancouver-based mining company has sold off non-core assets and a 17.2 per cent stake in the company to a Chinese firm for $1.7 billion to raise cash and pay down debt.

On Tuesday, Teck reported a profit of $937 million or $1.54 per diluted share on $1.9 billion in revenue, compared with a profit of $252 million or 47 cents per diluted share on $1.67 billion in revenue a year ago.

The profit was helped by several asset sales that closed during the quarter including the sale of its Andacollo gold royalty interest, gold assets in Turkey, and a one-third interest in the Waneta Dam power plant in southeastern B.C.

The cash raised was used to reduce debt and helped Teck shed a junk rating by some of the world's biggest debt rating firms, Lindsay said.

"We have investment grade ratings from three of the four North American rating agencies, reflecting the progress of our debt reduction and the strength of our underlying business."

Teck said it was waiting on Moody's revision in order to achieve investment grade status across the board.

Haytham Hodaly, a mining analyst of Salman Partners Inc. said he expects Moody's to revise its rating for Teck in the near future given Teck's "significant strides" in debt repayment and its market position.

"With coal prices continuing to be stronger and coal contributing a significant portion of their revenues, the company's position has improved, based not just on coal, but on copper and zinc as well."

Teck is optimistic about its coal and copper production levels for the rest of 2010. It expects a significantly higher margin on coal sales with prices in the range of $55 per tonne.

But it remains cautious about production at its Red Dog mine in Alaska, where the U.S. Environmental Protection Agency has stayed a renewal permit. If the delays extend beyond May, production at Red Dog will probably be curtailed in October, Teck said.

Teck shares closed unchanged at $41.71, with nearly 3.8 million changing hands Wednesday on the Toronto Stock Exchange.

[SpongeG]

great news!

Next month, Sony Pictures Imageworks (Alice in Wonderland, 2012), the animation and visual-effects arm of Sony Pictures Digital Productions, will announce its plans to open a Vancouver studio this spring.

...

Another big Hollywood player could be next. Both Hasselbach and Chenard say the interactive-entertainment software arm of George Lucas’s company Industrial Light & Magic (best known for the Star Wars films) is thinking about expanding north.

“LucasArts is definitely looking at Vancouver,” says Chenard, who says his students have had some face-time via Skype with Skywalker Ranch, the company’s creative headquarters.

LucasArts did not respond to a request for comment by deadline yesterday.

http://www.theglobeandmail.com/news/...rticle1540515/

[LeftCoaster]

Wow, interesting stuff. These announcements of major US studios opening operations in Vanouver have been pretty prolific lately... Quite surprising really considering the shape of the US economy and the Canadian dollar.

I guess vancouver just has a large talent pool, most of whom might just happen to be looking for work right now.

[SpongeG]

they pay well either currency for these kind of positions - the pee on work is sent to asia still - our advantage and what i have heard is Vancouver has the talent pool and its on the west coast and proximity to Hollywood

[LeftCoaster]

Lions Gate Metals and AusNiCo call off merger after failing to reach a deal
By The Canadian Press

VANCOUVER, B.C. - Lions Gate Metals Inc. (TSXV:LGM) and AusNiCo Ltd. have called off a plan to merge the two companies after failing to reach a deal.

Lions Gate chief executive Arni Johannson said several factors led to the decision.

"Some key issues were the lengthy due diligence and regulatory delays, a blockade at our proposed drill program site and market volatility," Johannson said in a statement.

"That said, we still own 100 per cent of a significant copper asset and are working diligently to resolve issues in the Poplar region."

Lions Gate owns three copper and molybdenum projects located in British Columbia.

AusNiCo is an unlisted Australian company with nickel exploration tenements in South East Queensland, Australia.

http://www.canadianbusiness.com/mark...ent=b223050624

[LeftCoaster]

Lions Gate amends poison pill to account for Icahn stock following opposition
By The Associated Press

LOS ANGELES - Lions Gate Entertainment is amending the conditions necessary to approve a shareholder rights plan that would help it thwart a hostile takeover.

Under its new rules, the movie studio will count the votes held by activist investor Carl Icahn.

Icahn has offered to buy shares he doesn't own for US$7 per share, but the company said the offer is too low.

Lions Gate shares closed up 29 cents, or 4.2 per cent, at $7.18 on Friday, suggesting investors believe a higher bid will emerge. Shareholders will vote on the plan May 4.

The company previously said it would exclude Icahn's votes, which account for about 19 per cent of all shares.

The company made the change after prominent proxy advisory firm RiskMetrics Group recommended shareholders vote against it.

http://www.canadianbusiness.com/mark...ent=b232992224

[LeftCoaster]

West Fraser Timber reports Q1 profit of $19.4 million, sales up from year ago
By The Canadian Press

VANCOUVER, B.C. - West Fraser Timber Co. Ltd. said Friday it earned $19.4 million in its latest quarter as revenue grew compared with a year ago, helped by improved lumber prices.

The forestry company said the profit amounted to 45 cents per share in its latest quarter compared with a loss of $83.1 million or $1.94 per share a year ago.

Sales totalled $687.8 million, up from $558.2 million.

"West Fraser's results reflect the efforts of our employees who maintained their focus on our culture of cost control and improved efficiency throughout a very bleak downturn," chairman, chief executive and president Hank Ketcham said in a statement.

"These efforts, along with improved pricing for our products, have positioned West Fraser to return to profitability."

In its outlook, West Fraser said the recent increase in lumber prices is largely driven by market and weather-related downtime across North America and inventory restocking.

The company warned lumber prices may decline later in the year as additional production comes onstream, while housing starts in Canada are likely to support demand and prices for panel products.

West Fraser said strong pulp markets should continue as economic growth in the consuming regions continues.

West Fraser (TSX:WFT) has operations in Western Canada and the Southern United States.

http://www.canadianbusiness.com/mark...ent=b231600218

[LeftCoaster]

Interfor to reopen Castlegar mill as lumber pricing and demand pick up
By Sunny Freeman, The Canadian Press

International Forest Products Ltd. says it will reopen one sawmill as dramatic increases in pricing and demand continue to take root in the lumber market, but remains wary of lingering uncertainty in the recession-battered industry.

"Clearly business conditions are much better than they were at this time last year or the immediately preceding quarter," CEO Duncan Davies told analysts Friday on a conference call to discuss Interfor's (TSX:IFP.A) improved financial results for the first quarter of 2010.

Davies said there is cause for some celebration as Interfor plans to restart one if its B.C. mills, at Castlegar, but there is also uncertainty in the market, especially in the U.S., where activity in the housing market remains close to historic lows.

"Don't get me wrong, we're enjoying the current market a lot more than the one experienced last year, but we believe caution is the right approach to take," he said, after reporting that quarterly revenues almost doubled from a year ago.

The Vancouver-based lumber producer lost $3.4 million or seven cents per share in the quarter ended March 31, compared with a loss of $13.6 million or 29 cents per share a year ago.

Revenue totalled $139.9 million, up sharply from $77.3 million.

Lumber shipments totalled 264 million board feet for the quarter, more than double a year ago, helped by production from Adams Lake, B.C., and the recent restart of operations at Grand Forks, B.C., as well as higher operating rates at the company's U.S. mills.

Davies said the company was surprised by a dramatic increase in lumber prices from the previous quarter. But higher log costs in the B.C. Interior and the Pacific Northwest, weak cedar markets, and the higher Canadian dollar offset some of the revenue gains.

Prices in the Spruce Pine Fur 2X4 North American cash market gained US$63 or 31 per cent per 1,000 board feet, and now hover above US$300.

And with composite lumber prices sitting above US$350 - far higher than the threshold rate of US $315 -export duty rates on shipments from Canada to the U.S. will drop from 15 per cent to 10 per cent on May 1st for the first time since the Canada-U.S. Softwood Lumber Agreement came into effect in 2006.

If prices remain stable, the duty could fall even further - to five or zero per cent - in June.

Even so, Davies said Interfor will continue with its current business model, balancing operating levels against sales activities and maintain strict control over inventories.

"We believe the sales strategy (in place) is best for us long-term, we're not about to change it dramatically based on short term pricing activity," Duncan said.

Interfor says it could restart Castlegar sawmill on a reduced operating basis., one of three it owns in the B.C. Interior, as early as July.

The forestry sector, which includes the pulp and paper and lumber industries, was hit hard by the slump in the U.S. housing market and a decline in business from newspapers and magazines caused by the recession and the migration of ad revenues to the Internet.

Construction and housing activity in the U.S. appears to be stabilizing and demand could pick up during the spring and summer building season as inventories remain well below the levels of one year ago and prices continue to firm.

Patricia Mohr, a Scotiabank commodities economist, said Interfor and other lumber companies are benefiting from prices that moved even higher in April.

"The reason for that is we're seeing a slow, but fragile recovery in U.S housing starts," she said.

"U.S dealers and wholesalers are having to restock lumber in an environment of quite tight supplies because more than 40 per cent of North American lumber mills are currently shut because of the difficulties in recent years."

Mohr said prices will likely continue to move higher, which will set off a gradual restart of mills across Canada, especially in B.C.

Meanwhile, Interfor will restrict discretionary capital spending to small, high-return projects for the foreseeable future.

Interfor has operations in British Columbia, Washington state and Oregon, including two sawmills on the B.C. coast, three in the B.C. Interior, two in Washington and two in Oregon.

Shares in the company were down five cents at $6.10 in mid-afternoon trading Friday on the Toronto Stock Exchange.

http://www.canadianbusiness.com/mark...ent=b231189816

[LeftCoaster]

Colombian government wants Greystar to file new environment impact study
By The Canadian Press

VANCOUVER, B.C. - Greystar Resources Ltd. shares plunged Monday after the Canadian mining company warned that its flagship Angostura project is now in doubt because of sweeping changes being sought by Colombia's environment ministry.

By midday, the Vancouver-based company's shares (TSX:GSL) were down $2.72 or almost 43 per cent at $3.72 on volume of more than 5.2 million shares, making Greystar one of the active issues on the Toronto Stock Exchange.

Greystar says Colombia's Ministry of the Environment, Housing and Territorial Development (MAVDT) wants the new environmental study that assumes the open pit mining project would occupy an area below 3,200 metres of elevation because of its location on the fringes of an environmentally sensitive area.

That would be a problem for Greystar since almost all of the project's infrastructure and half the proposed open-pit gold and silver mine would be above 3,200 metres, the company said in a news release..

"MAVDT's request would require the Angostura project to be completely redesigned," including identifying and acquiring new land positions to house displaced facilities and initiating new environmental baseline studies, Greystar said.

"At this juncture, the company has not had the opportunity to determine the feasibility of redesigning the Angostura project to comply with MAVDT's request," it said.

"However, this requirement will severely impact the project schedule and may have a material effect on its economic viability."

Greystar president and CEO Steve Kesler told a conference call with analysts that company was surprised when it learned of ruling by MAVDT ruling on Friday.

Kesler and other Greystar executives said the company had been working closely with Colombian officials and expected its project would be exempt from some provisions of the new law announced in February.

"It's a complex problem of definition" over just where sensitive environmental areas overlap with traditional mining areas, Kesler said.

He said the project, which he described as "one of the largest gold projects in development in the world" also enjoys "exceptionally strong support from local communities around the mine"

Executive vice-president Frederick Felder said that in discussions with the ministry back in the summer the company was told it would only be marginally affected by the new law.

"As to what we have in terms of guarantees, we actually have a written letter from the ministry saying that they understand Greystar's situation and will deal with it in an appropriate manner so that Greystar would not be affected by this change of law, ..." he said.

The company has five days to appeal the administrative decision and Kessler said it planned to file such an appeal by this Thursday. The MAVDT would then have 15 working days to respond.

"Our view is that decisions on how a project moves ahead should be taken on a much wider view incorporating both environmental, social, economic and security issues and not pure technical, legal interpretation, particularly where there is a lack of definition as to what is (and) where is Paramo, sub-Paramo,..." Kesler said.

The project, as envisaged before Monday's announcement, was expected to cost US$1 billion to build and US$3 billion to operate over a 15-year mine life. Greystar said it has spent more the $135 million so far and was in the process of securing US$650 million in financing for the project.

A prefeasibility study announced in March 2009 envisaged average annual production at Angostura of 511,000 ounces of gold and 2.3 million ounces of silver over a 15 year mine life.

The original environmental impact assessment was filed in December, before Colombia's mining code was modified in February.

The new code excludes mining from the Paramo ecosystem, which Greystar describes as an area with "glacier formed valleys and plains with lakes, peat bogs and wet and dry grasslands intermingled with shrub lands and forest patches."

"While the definition of Paramo is determined by fauna, flora and other ecological categories, it is also defined by elevation," Greystar said.

http://www.canadianbusiness.com/mark...3402224&page=1

[LeftCoaster]

West Fraser says worst is over as lumber industry recovers from 'depression'
By Sunny Freeman, The Canadian Press

West Fraser Timber Co. Ltd. says the worst is over for the forestry business as demand returns and lumber prices continue to rebound from one of the most devastating periods in the industry's history.

"We believe we can now see the light at the end of the tunnel in terms of the deep recession our lumber industry has suffered through since late 2006," West Fraser's (TSX:WFT) CEO Hank Ketcham told analysts on a conference call Monday, a day ahead of its annual meeting in Quesnel, B.C., and after the company reported its first quarterly profit in two years.

North American lumber prices were up 31 per cent during the first quarter of 2010, Ketcham said, and he expects lumber prices to remain strong during the busy spring building season.

Prices are so high that export duty rates on shipments from Canada to the U.S. will drop by five per cent in B.C. and 7.5 per cent in Alberta on May 1 for the first time since the Canada-U.S. Softwood Lumber Agreement came into effect in 2006.

If prices remain stable, the duty could fall even further - to zero per cent - in June.

The Vancouver-based forestry company saw profits rise to $19.4 million, or 45 cents per share in the first quarter of the year, compared with a loss of $83.1 million or $1.94 per share a year ago. Sales totalled $687.8 million, up from $558.2 million.

The Canadian lumber industry has been hammered by the U.S. housing crisis, since the majority of its product is used in south of the border. To cope with a drop in demand, forestry firms have cut capacity by as much as 50 per cent, closing mills and laying off thousands of workers to try to stave off deeper losses.

Ketcham said that supply and demand are coming back into balance after industry-wide downsizing during what he called a "depression" in the industry. He said he believes the worst is over in the business and housing fundamentals will gradually improve as the U.S. housing market begins to improve later this year.

Ketcham said lumber prices will remain solid for at least next couple of months, but added that the improved pricing will encourage producers to ramp up capacity, which will dampen prices after the spring as new home construction remains weak.

"Housing starts in the U.S. are still near historically low levels and we believe it will be a long and bumpy ride before new home construction returns to a level that supports long term demand of about 1.6 million housing units per year."

Pulp and paper prices will also continue to improve through the third quarter of the year, reflecting strong buying from China and extremely low pulp inventories, he said.

The company's Canadian mills were running at around 95 per cent capacity as it added a third shift at one of its Alberta mills during the quarter. Ketcham said they have sufficient log inventory to run at full capacity during the second quarter that ends June 30.

Meanwhile, West Fraser's mills in the United States ran at about 55 per cent capacity during the quarter due to weather-related slowdowns and are expected to ramp up to about 70 per cent production in the second quarter.

The company recorded a $15 million loss during the quarter from the shutdown of its Eurocan mill in Kitimat, B.C. on Jan. 31. The 40-year-old mill, located about 640 kilometres north of Vancouver, produced linerboard and kraft paper.

Ketcham said the company scaled back capital spending for the first time in its history during the recession, but now has a strong balance sheet and plans to be more aggressive on spending and paying down its debt.

"The past three years have been the most difficult in memory for our industry, but I believe that West Fraser has emerged as a stronger and even more competitive company than we were going into this recession," he said.

Last week, International Forest Products Ltd. (TSX:IFP.A) said its first quarter revenue nearly doubled to $139.9 million, up sharply from $77.3 million, last year. It also credited higher lumber prices for its improved financial results.

West Fraser has operations in Western Canada and the Southern United States. Shares in the company were up three per cent or $1.30 to $44.60 during Monday afternoon trading on the Toronto Stock Exchange.

http://www.canadianbusiness.com/mark...ent=b261610118

Some good news today and some bad news it seems. West Fraser seems to really be coming out of a prolonged bad spell as they were hammered by the US housing collapse and had been fighting the US counterveiling duties against Canadian softwood lumber for years before that.

The WTO case is finally settled and it appears as though demand for lumber is on its way back up too. Hopefully this will be a respite for BCs beleagured forestry industry. Most of the remaining firms will likely be coming out of this strech must leaner and more agile; costs have been cut and capital structure retooled over the years. The old saying, whatever doesnt kill you can only make you stronger.

[LeftCoaster]

Some news out of BCs fledgling energy economy:

Nextraction announces results of shale study in Appalachian Basin in U.S.
By The Canadian Press

VANCOUVER, B.C. - Oil and gas company Nextraction Energy Corp. (TSXV:NE) says it may have almost one trillion cubic feet of shale gas at its properties in the Appalachian Basin in the U.S. Midwest.

Vancouver-based Nextraction said Tuesday that an independent U.S. firm did the evaluation of how much shale gas is expected to be in place.

"Our results clearly indicate the Devonian Shale gas opportunity extents into our area of interest," president Mark Dolar said in a news release.

"We are extremely pleased with the results of our drilling and investigation in this new part of the Appalachian Basin," Dolar said.

Nextraction said it plans to continue its drilling program, which includes completing three additional wells in 2010 and 25 wells by the end of 2011.

The Vancouver-based company targets projects with known reserves and said it's currently developing a gas play in western Wyoming and shale gas resource play in eastern Kentucky and Tennessee.

http://www.canadianbusiness.com/mark...ent=b271960719