Vancouver Diversified Brazilian miner Companhia Vale do Rio Doce (CVRD) has acquired 42.1 million shares of Canico Resource (CNI-T), or about 93% of its outstanding common shares, thereby securing control of the Onca-Puma nickel project in Brazil.
GVRD offered $20.80 for each of the 45.2 million outstanding shares of Canico, which puts the value of its bid at about $940.6 million.
CVRD extended the expiry time of its takeover bid to December 8, in order to give remaining shareholders time to analyze and accept the offer. If necessary, CVRD will acquire any remaining shares by means of a statutory compulsory acquisition under Section 300 of the British Columbia Business Corporation Act. A new board of directors will then de-list the shares.
The Onca-Puma project is a nickel laterite project in Para state scheduled for production in 2008. A feasibility study estimates that it will cost US$1.1 billion to build a mine and processing plant capable of producing 57,000 tons of nickel annually.
Unlike Australian (or dry) laterite deposits, Onca-Puma is amenable to simple pyrometallurgical processing because of its low iron content and high nickel content (typical of saprolite deposits). Australian deposits have high iron content and low nickel content (typical of limonite deposits), and require newly developed pressure acid-leach technology that in certain cases has not performed to expectations.
CVRD is the world’s largest producer of iron ore and pellets, and a major producer of manganese and ferroalloys, aluminum products, and a producer of copper, potash and kaolin. It also operates railroads and ports in Brazil.
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