Rio Tinto PLC has slapped down $87.5-million for a 9.9-per-cent stake in Vancouver-based Northern Dynasty Minerals Ltd.Rio Tinto subsidiary Kennecott Canada Inc. will pay $10 each for 87.5-million shares of Vancouver-based Northern Dynasty, which is developing the Pebble project in Alaska.

The deal with Rio Tinto, the world's second-largest miner, provides a "Good Housekeeping seal of approval" to the project, Northern Dynasty president and chief executive officer Ronald Thiessen said yesterday.

"We wanted participation on an equity level by a major as an indication of how significant this project is," Mr. Thiessen said.

Northern Dynasty describes Pebble as one of the world's largest copper-gold projects. Rio Tinto and other parties were attracted by the size of the deposit as well as its politically stable location, Mr. Thiessen said.

Nippon Mining Holdings Inc., Japan's biggest copper producer, plans to raise as much as 75.6 billion yen ($650 million) for capital spending by selling new shares.

Nippon Mining plans to sell 70 million new shares to the public and 10 million new shares to Nikko Citigroup Ltd., it said in a statement filed today with the Tokyo Stock Exchange. The sale would increase the Tokyo-based company's shares outstanding by 9.4 percent, it said.

Proceeds from the sale will pay for the upgrade of an oil refinery and expansion of the company's smelting operations. Nippon Mining will invest 11 billion yen at its copper refining plant in Oita, southern Japan, and 14 billion yen at its refinery in Mizushima, central Japan.

Nippon Mining's oil refining unit, Japan Energy Corp., generates about 80 percent of its revenue.

China's imports of refined copper amounted to 47,000 tons in May, down 60.7 percent from the same month a year ago, according to data from China's General Administration of Customs.

Customs said in the first five months of this year, China imported 324,000 tons of refined copper, down 41.6 percent year on year.

Despite the decline in imports, China's domestic copper supply was sufficient due to increased copper production and decreased demand, China Business News quoted market analysts as saying on Tuesday.

From January to May, China's copper output increased by 220,000 tons compared with the same period of 2005.

Industry insiders attributed the decreased copper imports to the price gap between domestic and international markets, predicting that China's imports of copper would continue falling in June.

London Metal Exchange three-month metals were stronger Tuesday but the market is still searching for a more definite short-term direction, traders said.

Copper rose to $6,900 a metric ton on the late afternoon kerb close, up $160 on the previous PM kerb prices, but did so on fairly muted interest, traders said.

Aluminium and lead moved higher, but only slightly, each gaining just $2 and $3 on previous PM kerb prices, respectively. Aluminium finished kerb at $2,482/ton and lead at $968/ton. Once again, thin trading conditions prevailed.

"The market's just very, very quiet and although prices are stronger the changes are still well within the usual daily ranges," said one trader.

Zinc saw a relatively wide trading range, moving between $2,875/ton and $3,020/ton. Intraday highs above $3,000/ton were achieved as sentiment swung to the upside following evidence of stock drawdowns and cancelled warrant data in the early AM, according to Triland Metals Ltd. By afternoon, prices settled at $2,945/ton at kerb, up $35 on previous PM kerb prices.

"These moves are just noise rather than any sense of direction," said another trader. "Basically, the big problem the market faces at the moment is trying to find new direction and renewed interest from the investment community or consumers."

Current copper prices are too high to encourage fresh investment from funds but also not low enough to attract market bears, he said, adding that consumers are also reluctant to buy at current levels.

"The market is really hunting at the moment for liquidity and fresh interest."

3 months metal (prices in dollars a ton)
Bid – Ask, Change from Tuesday PM kerb

Copper 6900.00-6910.00, Up 160.00
Lead 968.00-970.00, Up 3.00
Zinc 2945.00-2950.00, Up 35.00
Aluminium 2482.00-2483.00, Up 2.00
Nickel 20400.00-20405.00, Up 600.00
Tin 7925.00-7940.00, Up 75.00

Gold futures closed lower Wednesday, as the dollar rose against the euro and some investors opted for caution ahead of Thursday's Federal Reserve decision on interest rates

Gold for August delivery dropped $3.40 to $581 an ounce on the New York Mercantile Exchange, after earlier touching a low of $579.10.

"Another day of range play has been seen in the precious metals as traders seem content to sit on the sidelines ahead of tomorrow's potentially pivotal Fed rate decision," said James Moore of TheBullionDesk.com.

On the currency markets, the dollar posted gains against the euro Wednesday, putting pressure on gold.

Other metals prices were mixed. July silver was down 4 cents at $10.155 an ounce, July platinum dropped $10.10 at $1,178.2 an ounce and September palladium edged down $1.40 at $312.80 an ounce. July copper added 10.60 cents at $3.293 a pound.
Focus on the Fed

The Federal Reserve is widely expected to raise rates by another quarter point to 5.25% tomorrow, although some market players anticipate a half point increase.

Jon Nadler, investment products analyst at Kitco.com, said the Fed decision has been exhausted as a subject of worry for all markets, "and only a half-point surprise may make any difference at this point.

Still, the decision and some month and quarter-end window dressing "could shake things up before the end of the week," Moore said. For now, the current $550 to $600 range appears "pretty solid."

The precious metals market will remain volatile in the short term, but precious metals are still an attractive long-term investment given inflation worries, high oil prices and global political tensions, according to Donald Doyle, chief executive of Blanchard & Co. Inc, the biggest retail dealer of rare coins and precious metals in the U.S.

"We think the impending rate hike will come with the qualification that this may be the last rate raise followed by a pause," Doyle said. "The Fed's leadership doesn't want to establish an image that makes them look responsible for an economic slowdown in the face of what are currently tame inflation numbers."

Investors should view the current market correction as a good time to add to or build positions, he said.

Peter Grandich, editor of The Grandich Letter, said the market should look past tomorrow's decision.

"The upcoming holiday period in the U.S. should have more of an impact on gold's trading pattern than the Fed interest rate decision," Grandich said.

On the supply side, copper inventories rose by 778 short tons to 8,174 short tons as of late Tuesday, according to Nymex data. Silver supplies rose by 391,913 troy ounces to 102.8 million.

Au Martinique Silver Inc. announced Wednesday that it has acquired a high grade silver and base metal prospect at Greyhound Lake in the central Churchill region of Nunavut. The prospect area occurs along a mineralized horizon within an Archean greenstone belt where samples of bedded, sulphide-mineralized boulders have returned silver values of 47 and 99 ounces per ton.

The prospect area was the focus of two small-scale exploration surveys carried out in the past. In 1969, samples of mineralized float containing pyrite, galena, sphalerite and chalcopyrite were traced along surface for about 60 metres. This material was believed to be derived from frost-heaved bedrock. A sample from one boulder returned values of 6.0% lead, 1.9% zinc, 0.1% copper and 0.12 ounces per ton gold. No assays were available for silver. In 1998, a prospecting party discovered sulphide-mineralized float along the edge of a small lake about four kilometres south of the 1969 location. The float was believed to have come from a bedrock source beneath the lake. Two samples were collected and assayed 0.48% lead, 0.1% zinc, 0.33% copper and 1,632 grams per tonne silver (47.6 ounces per ton); and 0.58% lead, 1.41% zinc, 0.59% copper and 3,400 grams per tonne silver (99.16 ounces per ton). The horizon that hosts these high metal values is poorly exposed as intermittent subcrop rubble and sparse outcrop along a strike length in excess of 12 kilometres. Because of low metal prices at the time of the surveys, detailed exploration was not carried out to follow-up on these encouraging results. The Company's recent acquisition of ten mineral claims, comprising 10,000 hectares (25,000 acres), gives it a strategic land position over the highly prospective parts of the favourable geologic horizon.

Greyhound Lake is located five kilometres northwest of Whitehills Lake in the Baker Lake region of Nunavut. Metallogenic and geologic studies by the Geological Survey of Canada (Paper 1999-C, p. 29-41) suggest the volcanic belt extending across the Greyhound Lake Property contains a diverse metal endowment and is highly prospective for precious and base metal deposits. The GSC studies also suggest that silver appears to be the best exploration guide for mineral occurrences across this greenstone belt.

Paul Pitman, President of Au Martinique Silver, commented, "We are very excited to acquire the Greyhound Lake property. The high metal values in a virtually unexplored part of a prospective mineral belt suggest there is excellent potential for a significant precious metal discovery. The high silver values are especially encouraging. We anticipate carrying out a program of airborne geophysics and prospecting during the summer months of 2006."

Mitsui Bussan Commodities Ltd. raised its 2006 copper price forecast during a half-year review, citing commodity investment trends since the start of the year, strong demand and supply side problems for some LME traded metals.

Mitsui's London Metal Exchange cash copper price forecast rose to $6,530 a metric ton, nearly double from a forecast of $3,538/ton made at the end of 2005.

For aluminium, analyst Michael Cuoco forecast a 250,000-ton deficit for 2006 and a marginal surplus for 2007.

Alumina prices "appear to have peaked" and are headed lower because of planned capacity increases, notably in China.

Prices are forecast at $2,546/ton basis LME cash for 2006 followed by a $2,325 average for 2007. This compares with a forecast of $2,162.50/ton end-2005.

The zinc market will show a deficit of 130,000 tons during 2006, extending into 2007 before a return to surplus in 2008, Mitsui said.

A rise in mine production in Myanmar, Laos, Iran and Turkey has contributed to decrease an earlier deficit forecast of 336,000 tons.

"Due to the lessening deficit over the next 18 months, we expect prices to soften from the current $3,000 mark to average $2,979 for 2006 and $2,706 in 2007," Cuoco said.

LME cash price forecasts in dollars/ton:

2006 – Q3 – 2007

Copper 6,530 7,100 6,244

Aluminium 2,546 2,600 2,325

Zinc 2,979 3,200 2,706

Lead 1,037 930 841

Nickel 18,070 20,000 16,800

Chile's copper production totaled 458,521 metric tons in May, inching up 0.7% from the 455,526 tons produced in the same month in 2005, the National Institute of Statistics, or INE, said Wednesday.

In April, the country mined 442,641 tons of the metal.

Year-to-date, output increased 2.0% to 2,150,779 tons, from 2,108,845 in January-May 2005, INE reported.

Chile's total copper production in May rose on increased copper blister production, with offset falling cathode and concentrate output, the INE said withouth providing additional data on the amounts produced.

Chile is the world's largest copper producer, accounting for more some 37% of world output.

INE also released molybdenum output data, as the metal last year became the country's second-largest export, in terms of revenues.

In May, Chile's molybdenum production totaled 3,649 tons, a 9.4% fall from the 4,028 tons produced in May 2005. Year-to-date output tumbled 14.5% to 16,441 tons, compared with 19,231 tons produced in January-May 2005, INE said.

INE's metallic mining index rose 0.7% during the month, while its non-metallic mining index fell 2.6% in May from the same month a year earlier.

The overall mining index rose 0.4% on the year. In its April data, released last month, INE adjusted its index to 2003 as base year from the previous base year of 1990, increasing the weighting of copper and molybdenum.

Paramount Gold Mining Corp. provided an update on their recently signed agreement with Teck Cominco Limited to create the Andean Gold Alliance in South America, a strategic partnership for the exploration of 22 properties in Chile, Argentina and Peru.

Based on data provided by Teck Cominco Limited, as well as field visits to Chile and Argentina, the Paramount team in South America have identified 5 high priority properties of which 3 are in Argentina and 2 are in Chile.

Alain Vachon, General Manager for Paramount in South America commented "Teck Cominco Limited is a top-tier major mining company and we feel very fortunate to be their strategic partner for gold exploration in South America. We have acquired a very good portfolio of properties with significant upside potential and are confident that one of them will become a major discovery. Our plan is to aggressively work the 5 high priority properties we have identified over the next 12 months with the objective of proving up a geological resource. We have a team of geologists with the expertise to face such a challenge and this will be the key to our success."

Below is a brief description of the 5 high priority properties:
Chile: Maduro property

The Maduro property shows evidences of Au-Ag High Sulphidation and Porphyry mineralization. The source of the high grade samples collected by Teck Cominco Limited in 2004-2005 have not been identified. Teck Cominco Limited reported values as high as 73.8 g/t Au on a rusty and siliceous float. The satellite imagery shows an important zone of alteration on the property that has to be investigated.
Chile: Conali property

The Conali property is located in a prime exploration area known as the Barrick Gold Chile-Argentina mining camp that hosts approximately 50 M oz of gold equivalent. This mining camp comprises the Pascua-Lama deposit, the Veladero deposit (currently in production) and the El Indio deposit (actually closed). Conali is located along the same NNE volcanic trend that links Veladero to El Indio approximately 10 km north of El Indio and 20 km south of Veladero. Conali was staked by Teck Cominco Limited following the interpretation of ASTER satellite imagery which shows an important zone of alteration associated to a WNW fault system. This is a pattern well known and recognized at Pascua and Veladero.
Argentina: Espota property

The Espota property hosts porphyry gold mineralization characterized by a halo of alteration measuring 3 km x 2 km centering on a 500m x 700m core where gold and copper values are associated with a nucleus of potassic and silica alteration. Teck Cominco Limited conducted detailed geology, extensive sampling, geophysics and drilled 6 RC holes. Drilling failed to intersect economic mineralization while surface samples returned anomalous values in gold, silver, copper, arsenic and bismuth. Of note, gold values to a maximum of 25.34 g/t Au were encountered.
Argentina: Fortuna property

The Fortuna property is characterized by the presence of replacement pyrite-jarosite-gold mineralization and by polymetallic veins interpreted to be of intermediate sulphidation type. Grab samples from veins that range from 2 to 4 metres wide show values up to 8.7 g/t Au, 167 g/t Ag, less than 1% Cu, 1% Pb and 0.56% Zn. Abundant and widespread green copper oxide staining on jointing in quartzite suggests that the property also has potential for porphyry Cu style mineralization.
Argentina: Castanos property

This property shows complex geology composed of volcanics and intrusives where intermediate sulphidation, high sulphidation and porphyry copper style alteration and mineralization has been outlined. Values up to 19.54 g/t Au and 1,653 g/t Ag have been obtained from a sampling program undertaken by Teck Cominco Limited.

All 5 of these high priority properties present key components, including size of the system, alteration pattern, known mineralization and attractive setting that compare favourably to existing mining operations in South America.
About Teck Cominco Limited

Teck Cominco Limited (TSX:TEK.B) is a $13 Billion diversified mining company, headquartered in Vancouver, Canada. The company is a world leader in the production of zinc and metallurgical coal and is also a significant producer of copper, gold and specialty metals.
About Paramount Gold

Paramount Gold Mining Corp. is a precious metals exploration and development company. It is management's objective to grow Paramount into a significant gold and precious metals producer by developing the Andean Gold Alliance with Teck Cominco in South America, the San Miguel and Linda projects in Mexico and Peru, and by acquiring other advanced-stage projects and/or producing mines in the most prolific precious metal districts in the world. The Company trades on the OTC market under the symbol "PGDP" and on the Frankfurt Exchange under the symbol "P6G".

Copper fell on mounting concern that the world's central banks will continue to boost interest rates to combat inflation, slowing the economy and demand for metals. Aluminium and zinc also declined.

Copper has lost 21 percent since trading at a record on May 11 after central banks in Asia and Europe increased borrowing costs. Economists forecast the U.S. Federal Reserve to raise rates when it meets on June 28-29. European Central Bank council member Nicholas Garganas said yesterday the bank is ready to accelerate the pace of rate increases inflation risk mounts.

"People look at the wider macro-economic concerns," said Neil Buxton, managing director at London-based GFMS Metals Consulting Ltd. "It's still not clear how a marginal slowdown in growth will filter down to the base metals sector."

Copper for delivery in three months declined $70, or 1 percent, to $6,930 a metric ton at 2:34 p.m. on the London Metal Exchange. Copper traded at a record $8,800 on May 11.

On the Comex division of the New York Mercantile Exchange, copper for delivery in September dropped 6.3 cents, or 2 percent, to $3.17 a pound at 9:35 a.m. local time. A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.

The Fed will raise its target interest rate by a quarter point to 5.25 percent after its meeting, according to 122 of 124 economists surveyed by Bloomberg. Interest-rate futures show traders see a 100 percent likelihood of a Fed increase. If the Fed raises the benchmark U.S. interest rate for a 17th straight time, it will extend the longest run of increases in a quarter century.
Forecasts cut

Barclays Plc, the U.K.'s third-biggest bank by market value, cut its metals price forecasts because it expects the U.S. rates to rise to 6 percent this year, compared with a previous forecast of 5.5 percent. The bank cut its forecast for average copper prices this year by 5.8 percent to $6,876. Barclays cut its nickel forecast by 3.6 percent and aluminium by 5.2 percent.

"We expect the recent pattern of sideways and highly volatile trading to continue for most of the third quarter," Barclays analysts led by Kevin Norrish said in a report yesterday.

Copper's decline is temporary, Frank Holmes, the chief investment officer of U.S. Global Investors in San Antonio, said yesterday in an interview. "We can see copper at $6-$7 a pound" as supply shortages of the metal likely will persist, he said.
Inventory decline

Copper inventory monitored by the LME fell by 2,000 tons, or 2.1 percent, to 93,050 tons, the lowest since Jan. 13, the exchange said today in a daily report.

Production of copper exceeded demand in March by 15,000 tons, the International Copper Study Group said today. Consumption in China, the world's largest copper-using nation, was down 6.4 percent in the first quarter, the Lisbon-based group said.

Nickel rose $125, or 0.6 percent, to $20,100 a ton in London, and has rallied 38 percent in the past year.

"Nickel stocks have come down a great deal so prices may rise further," said Kevin Tuohy, a London-based trader at Man Financial Ltd. The metal used to produce stainless steel rose to record $23,050 a ton May 26.

Stockpiles of nickel monitored by the LME have dropped 69 percent this year to 11,142 tons, according to LME data. This is the lowest since September 2005.

Among other LME metals, aluminium fell $40 to $2,510 a ton and lead dropped $12 to $965 a ton. Zinc gained $20 to $3,010 a ton and tin fell $25 to $7,875 a ton.

Data indicating global copper stocks rose in the three months to March pressured London Metal Exchange three-month copper prices lower Tuesday, traders said.

At late kerb in London, prices were down $259 on the previous day's kerb, but fell even further in post-kerb trading, albeit on thin volume, traders said. After finishing late kerb at $6,740/ton, prices unwound to$6,725/ton in subsequent trading.

A round of LME inventory declines helped copper support prices in morning trading but gains were reversed with news from the International Copper Study Group showing a surplus in March.

International Copper Study Group data showed a surplus of 15,000 tons for March and a 64,000-ton surplus for January-March, rising to 150,000 tons on a seasonally adjusted basis.

Copper needed to close above $7,250/ton for more significant gains to be made, said one analyst.

Aluminium followed copper's cue, falling $68 to $2,480/ton at the late kerb. Zinc fell $75 on the previous kerb to $2,910/ton. Nickel was down $175 on Monday's PM kerb to $19,800/ton.

Volumes remained thin throughout the session, and market participants said liquidity is expected to remain light into next week owing to the U.S. holiday. Traders are also awaiting the U.S. Federal Open Market Committee meeting late Wednesday which is expected to provide fresh trading cues.

3 months metal (prices in dollars a ton)
Bid – Ask, Change from Monday PM kerb

Copper 6740.00-6750.00, Dn 259.00
Lead 965.00-965.50, Dn 12.00
Zinc 2910.00-2920.00, Dn 75.00
Aluminium 2480.00-2485.00, Dn 68.00
Nickel 19800.00-19850.00, Dn 175.00
Tin 7850.00-7950.00, Dn 25.00

After rallying to as high as $599 an ounce, gold futures ended lower Tuesday, as jitters took over the market ahead of the Federal Reserve's decision on interest rates

Gold for August delivery closed down $3.30 at $584.40 an ounce on the New York Mercantile Exchange.

"The mining stocks led gold downward as the market grew a bit nervous in anticipation of the Fed meeting and investors prepared for the long trading break in the U.S.," said Brien Lundin, editor of Gold Newsletter.

Other metals prices were mixed. July silver dropped 4.5 cents at $10.195 an ounce. July platinum rose $7 to $1,188.3 an ounce. September palladium edged down $6.35 to $314.20 an ounce and July copper declined 13.70 cents to $3.187 a pound.
Investors focused on Fed

The Federal Reserve is widely expected to increase interest rates on Thursday, and the meeting "is keeping the metals traders on the edge as they square positions ahead of it," said Dale Doelling, chief market technician at Trends In Commodities.

In the short term, gold is "vulnerable to bouts of long liquidation" with the Fed, the end of the month, quarter and first half on Friday, and the U.S. Independence Day holiday early next week, said James Moore of TheBullionDesk.com.

In the long term, Moore said, gold remains an attractive investment given inflation worries, high oil prices, the soaring U.S. deficit, and the continued uncertainty surrounding the nuclear ambitions of Iran and North Korea.

Elsewhere in the commodities sector, crude-oil futures hit a two-week peak Tuesday after the temporary closure of a channel in Louisiana hurt production at local refineries. Crude for August delivery closed up 12 cents at $71.92 a barrel, pulling other petroleum products higher with it.

On the currency markets, the dollar traded flat against major rivals, after posting losses yesterday and giving some strength to gold.

"If the dollar turns lower, it may just provide the spark that will allow the precious metals to gain some footing and begin to move higher," Doelling said.

On the supply side, gold inventories were unchanged at 8.03 million troy ounces, as of late Monday, according to New York Mercantile Exchange data. Silver supplies fell by 210,383 troy ounces to 102.4 million.

Copper inventories were unchanged at 7,396 short tons.

Chinese silver production will increase 28% over the next five years to 8,000 tons a year "as higher prices encourage new investment and increasing imports of lead and copper concentrates produce by-product metal," according to Investec Securities.

Chinese imports of copper in all forms for the first five months of the year declined 15% compared with 2005, said William Adams, metals analyst at BaseMetals.com.