Imperial makes bid for bcMetals

Vancouver – A newly launched takeover bid for bcMetals (C-V) could catapult Imperial Metals (III-T) into a much larger gold and copper producer, assuming the company completes the acquisition as planned and proceeds with development of the large Red Chris copper-gold project in the Iskut region of northwestern British Columbia.

Imperial currently produces copper and gold from its wholly owned Mount Polley mine near Williams Lake, B.C., and copper and molybdenum at its 50%-held Huckleberry mine, also situated in central British Columbia. The company reported net income of $26.6 million in the latest quarter ended June 30, compared with $2.3 million a year earlier. Mill throughput at each open-pit operation averaged about 18,500 tonnes per day.

bcMetals is proposing to develop a conventional open-pit mine at Red Chris, where more than $30 million has been spent on exploration and mine development to date. Average annual production for the first five years is projected to be 110 million lbs. copper and 75,000 oz. gold, both contained in concentrate, starting in mid-2008.

The proposed mill would operate at 30,000 tonnes per day, or higher if warranted by increases to the existing resource and reserve base. At last report, proven and probable reserves stood at 276 million tonnes averaging 0.349% copper and 0.266 gram gold, containing 2.12 billion lbs. copper and 1.18 million oz. gold (in situ). Measured and indicated resources total 446.1 million tonnes at 0.36% copper and 0.29 gram gold, plus additional inferred resources in several zones.

bcMetals had intended to carry out a 7,000 to 10,000-metre drill program this year to upgrade resources and expand reserves, but work was suspended earlier this summer because of a blockade by a dissident group of natives who had also blocked access to other mineral projects in the district. The company has since obtained an injunction and enforcement order to allow access to the site, which is situated about 12 km east of Highway 37.

Imperial Metals has offered $0.95 cash for each share of bcMetals, which represents a 46% premium over the average closing price for the last 20 days of trading to Sept. 7. The company will mail documents related to its takeover bid shortly, and expects the offer to remain open for 35 days following the mailing date. The offer is subject to regulatory and other approvals, and the acceptance of not less than 90% of bcMetals common shares on a fully diluted basis.