CANADA
The Toronto Stock Exchange was close to flat by Tuesday’s close after
spending most of the day in negative territory following some
disappointing housing-start numbers. EnCana (ECA) led energy stocks
lower as gas prices retreated for the first time in five days. Gold futures
rose above US$1,250 an ounce for the first time, spurred by continued
fears of a worldwide slide into recession and as investors sought out an
alternative to currencies.

Gold (GOLDC : NYMEX : US$1245.60), Net Change: 4.80, % Change: 0.39%
Everyone's looking for a European Vacation. The no-confidence vote in the euro persisted as investors continued the safehaven
flight to gold. Gold futures rose to their highest-ever settlement on Tuesday – $1,251.20 an ounce. Caveat Emptor: David
Rosenberg, chief economist and strategist at Gluskin Sheff + Associates, citing the Commitments of Traders report, noted
yesterday that while he is a huge bull of bullion he is concerned over the near-term outlook since this now looks like an
overcrowded trade...the net speculative long position is back flirting near all-time highs. The reality is that the gold could
correct all the way to $1,112/oz (the 200-day mover average) and it still wouldn’t violate any long-term trend line. On a relative
basis, the silver trade looks far less crowded.

Mercator Minerals* (ML : TSX : $1.80), Net Change: 0.18, % Change: 11.11%, Volume: 3,964,626
Streaking through the park. Mercator soared on news that May was a record month for molybdenum production at its Mineral
Park mine in Arizona. May production totalled 3,152,221 lbs of copper, 331,923 lbs of molybdenum and 45,914 oz of silver.
The record-setting molybdenum production was driven by improvements in the recovery levels achieved in April as the
company continues to make modifications to the circuit. It is also proceeding with the installation of additional rougher flotation
cells, which is scheduled for completion in September. Recoveries for May averaged 76.6% for copper and 54.5% for
molybdenum as compared to 72.1% and 42.0%, respectively, in April. President and CEO Mike Surratt noted, "Successively
better production at Mineral Park during March, April, and May are a direct consequence of the plant improvements we have
made and will continue to make at Mineral Park. We are making steady progress, with increasing recoveries and falling unit
operating costs." Notably, the company recorded estimated operating cash costs of $1.72/lb copper and $10.23/lb of
molybdenum on a co-product basis, substantially below the estimated year-to-date monthly operating cash costs of $2.35/lb of
copper and $12.36/lb of molybdenum on the same co-product basis (based on average monthly production of 2.4 million lb
copper and 238,000 lbs molybdenum). We further note that some analysts have begun to speculate that Mercator could be
potential target for newly-formed Quadra FNX (QUX). This new mining company, created from the merger of Quadra Mining
and FNX Mining, considers itself a consolidator of the mid-tier mining sector and has indicated that it plans to focus on copper
acquisition opportunities in the Americas.

Uranium One* (UUU : TSX : $2.53), Net Change: -0.09, % Change: -3.44%, Volume: 10,159,290
From Russia with takeover? Uranium One announced acquisition plans to acquire Russian state-owned JSC
Atomredmetzoloto’s (ARMZ) 50% interest in the Akbastau Uranium Mine and its 49.67% interest in the Zarechnoye Uranium
Mine, both located in southern Kazakhstan. Post-acquisition, Uranium One is expected to be among the world's top-five
uranium producers by 2011. The acquisition will increase Uranium One's steady-state production from its Kazakhstan assets by
60% to roughly 16 million lbs. Total cash-costs-per-pound-sold are expected to remain less than US$20/lb on a consolidated
basis. Uranium One expects to realize management and operating synergies upon integration of these assets, especially at
Akbastau, which is contiguous to the company's Karatau Uranium Mine. ARMZ will contribute its interests in the Akbastau and
Zarechnoye joint ventures and US$610 million in cash, in return for 356 million new common shares of Uranium One.
Following closing, Uranium One will pay a special cash dividend of at least US$1.06 per share to shareholders other than
ARMZ. On completion of the transaction, ARMZ will own not less than 51% of the company's outstanding common shares.
ARMZ currently holds 23.1% of Uranium One's outstanding common shares. ARMZ has agreed to a standstill of 18 months
from closing during which it may not, without prior consent, dispose of or acquire any additional Uranium One shares, except
pursuant to agreed anti-dilution rights, which will permit ARMZ to maintain at least a 51% interest in the company. Separately,
Uranium One announced that it has recently sold substantially all of its previously acquired shares of Paladin Energy (PDN).