FNX Mining (FNX-T) has adopted a shareholder rights plan attaching rights to each of its more than 50.2 million shares currently outstanding. The rights will also be issued along with any newly minted shares.
FNX spokesman David Constable told Reuters that the plan was prompted by the recent discovery of high-grade copper, nickel, and platinum group element mineralization behind the Levack no.2 mine shaft, 40 km north of Sudbury, Ont. Constable says the plan is aimed at protecting shareholders from a quick hostile bid.
The company says it is currently not aware of any specific takeover bid.
The plan, effective immediately, is aimed at providing the company and its shareholders adequate time to evaluate any takeover bid, and consider alternative plans in the face of such a bid.
The plan will be automatically trigged by an unauthorized bid or acquisition of more than 20% of FNX’s outstanding shares. In either case, each existing shareholder would be able to exercise his or her share rights at half the company’s going share price.
To be permitted, a bid must be presented to all shareholders, and must remain open for at least 60 days. If the bid receives more than half of the company’s outstanding shares, the acquirer can take up and pay for the shares but must also extend the offer for another 10 days.
The plan will be put to a shareholders vote on May 19.
In late February, drilling behind the Levack no.2 shaft returned up to 3.1 metres (beginning 1,634 metres below surface) running 26.2% copper, 3% nickel, plus 4.2 grams platinum, 9.8 grams palladium, and 0.45 gram gold per tonne, in hole 6010. A 5-metre section lower in the hole yielded 26.2% copper, 3.7% nickel, plus 5.1 grams platinum, 10 grams palladium, and 0.35 gram gold.
Levack is one of five formerly producing mining properties acquired by the Sudbury joint venture in 2003 from Inco (N-T). FNX, with 75% of the joint venture, and Dynatec (DY-T) with 25% recently reopened the McCreedy West mine, which was also included in the land package (T.N.M., Sep. 27 – Oct 04).
Shares in FNX were a nickel higher at $6.35 in late afternoon trading in Toronto following the news on April 8.
Be the first to comment on "FNX adopts poison pill plan"