A friendly bid from LionOre Mining International (LIM-T) is offering A$285 million for Australian nickel producer MPI Mines, which operates a nickel mine near Kalgoorlie, Western Australia.
LionOre is offering A$1 plus 0.1675 of a LionOre share for each share of MPI. The implied price per share is A$2.20.
The deal would see LionOre take over MPI’s nickel interests while the company’s gold interests, valued at A$36 million including A$12 million in working capital, were distributed to MPI shareholders in a new company.
MPI’s board has endorsed the offer and three significant shareholders have entered into lock-up agreements. An MPI shareholder meeting, to vote on the spin-off of the gold assets, is scheduled for Nov. 18 and LionOre says it could close the offer by Dec. 11.
MPI’s principal asset is an 80% interest in the Black Swan nickel mine near Kalgoorlie; it also owns 80% of a development-stage nickel project in Western Australia known as Honeymoon Well. A subsidiary of OM Group (OMG-N) holds the other 20% and has a takeoff agreement for concentrates from Black Swan.
Black Swan consists of one open pit and one underground mine, scheduled to produce 12,000 tonnes of nickel in concentrate in 2005.
Honeymoon Well, which is at a pre-feasibility stage, has an indicated resource of 131 million tonnes grading 0.8% nickel.
Be the first to comment on "LionOre bids for Australian nickel producer"