Known primarily for its mining ventures in Latin America, Jordex Resources (VSE) has made a move to acquire Moraga Resources (VSE) which has mineral property holdings on northern Vancouver Island.
Subject to a due diligence review, Jordex plans to offer Moraga shareholders one share of Jordex for each three common shares of Moraga. In addition, Moraga warrant holders are offered one Jordex warrant for each three Moraga warrants.
The offer is subject to Jordex receiving a minimum of 65% of both the outstanding warrants and shares of Moraga.
With Jordex trading at the $2.65 level, the 1-for-3 offer amounts to a premium of more than 20% over Moraga’s recent price of 72 cents.
Brian Hinchcliffe, president of Jordex, said the company is on good terms with Moraga and characterized the takeover as “friendly.” A representative for Moraga could not be reached for comment by presstime.
Hinchcliffe noted that Moraga’s assets would act as a solid anchor for Jordex’s interests in Latin America. He also said the cash flow from those interests could be used to further develop Moraga’s porphyry deposits.
Moraga Resources is earning interests in two porphyry copper-gold deposits near Port Hardy, B.C.
The company can earn a 50% interest in the Red Dog property from Crew Natural Resources (VSE) by spending a total of $3.5 million.
The Red Dog property hosts two mineralized zones estimated to contain a combined preliminary reserve of 50 million tons grading 0.32% copper and 0.012 oz. gold per ton. Moraga can also earn a 45% interest in the adjacent Expo property from BHP-Utah Mines by spending $2.7 million.
The Expo property contains an estimated preliminary reserve of 456 million tons grading 0.26% copper and 0.01 oz. gold.
Both the Expo and the Red Dog properties are seen as potential sources of ore for BHP’s Island Copper mine, about 15 miles to the southeast.
Jordex Resources is involved in mining and exploration in both Bolivia and Venezuela.
The company owns a 50% interest in Bolivian mining company, Compania Minera Tiwanacu. Jordex can purchase an additional 15% for US$2 million and the remaining 35% for US$8 million.
Tiwanacu owns two mines and two mills. The mills are currently operating at a combined rate of about 420 tons per day processing ore from the company’s two small mines as well as operating under contract for a number of other mining operations in the area.
The company estimates proven and probable reserves at its two mines as well as at contracted operations total about 276,000 tons grading 12% zinc, 6 oz. silver and about 0.8% tin.
The company is working to expand the combined milling rate of the two operations to about 800 tons per day and expects to produce about 38,000 tons of zinc concentrate this year at an average grade of about 51% zinc and 200 oz. silver.
Hinchcliffe estimates production will exceed 50,000 tons of zinc concentrate next year.
The company also has a 20-year agreement with a Bolivian company to develop and mine a nearby property which contains preliminary reserves of over two million tons grading 15% zinc and 30 oz. silver.
Tiwanacu may acquire a fourth mine shortly if its bid in a privatization sale is successful.
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