LionOre’s MPI takeover complete (December 22, 2004)

Mid-tier base metal producer LionOre Mining International (LIM-T) will move to a compulsory acquisition of Australian nickel producer MPI Mines after almost 95% of MPI’s shares were tendered to its takeover offer.

LionOre bid A$1 in cash plus 0.1675 of a LionOre share for shares of MPI in mid-October. On Dec. 7 it extended the offer deadline to Dec. 22 and made the offer unconditional on Dec. 13 and the MPI board, which had recommended the LionOre offer, resigned the next day to make way for LionOre appointees.

MPI owns 80% interests in two projects in Western Australia: the Black Swan nickel mine near Kalgoorlie, which is forecast to produce 12,000 tonnes nickel in concentrate in 2005, and the Honeymoon Well project, near Mt. Keith. Finnish-American nickel refiner OMG Kokkola Chemicals holds the minority interest in both projects.

Honeymoon Well, with a 131-million-tonne indicated resource grading 0.8% nickel, will be the subject of a metallurgical testing program and feasibility study. LionOre believes its Activox hydrometallurgical process, currently in large-scale pilot testing at LionOre’s Tati nickel mine in Botswana, may inmprove the economics of developing Honeymoon Well.