Northgate increases stake in Geddes after Cominco buys 17%

Northgate President John Kearney said he was caught a little off guard when Vancouver resource giant Cominco Ltd. (TSE) revealed that it had purchased 2,193,000 Geddes shares on the open market.

The purchase brings the number of Geddes shares held by Cominco to 4.24 million or 17%, plus 501,000-share purchase warrant.

While Cominco said “it had no present intention of making a formal takeover bid for Geddes,” Northgate immediately moved to bolster its own position by purchasing 2.3 million common shares of Geddes and 400,000-share purchase warrants.

As a result, Northgate now holds over 11.1 million shares of Geddes which controls the 118-million- tonne (grading 1.9% copper, 0.08% cobalt and 0.2 g gold per tonne) Windy Craggy project in British Columbia.

“We knew they liked the project but we were a little surprised that they (Cominco) moved up so quickly,” he said.

“We wanted to leave no doubt as to who is calling the shots at this time,” said Kearney, who isn’t anticipating any immediate agreement involving Northgate and Cominco with respect to Windy Craggy. “At the appropriate time, we may bring in partners,” he said.

Elsewhere, Northgate has informed Geddes that it intends to exercise its right to subscribe for and purchase 750,000 common shares and 750,000-s hare purchase warrants of Geddes after a $4.5- million rights offering is completed.

Those shares and warrants, when exercised, will bring Northgate’s investment in Geddes to about $18 million and its stake in the company to around 46%.

The Geddes issue was trading recently at $2.15 on The Toronto Stock Exchange in a 52-week range of $1.05-2.60. At presstime, the warrants traded at 50 cents .

]]>