Vancouver — The latest in a series of industry consolidations sees Lumina Resources (LUR-T, LUMNF-O) merging with Western Copper (WRN-T, WCPCF-O) in an all-share deal.
The copper-focused juniors have agreed to a deal whereby Western Silver will issue one common share for each Lumina share outstanding. The planned transaction, valued at about $26 million, represents a 63% premium on Lumina’s 20-day trading average based on the Sept. 15 closing price of both companies’ shares.
Officers and directors of Lumina, representing a 29.5% shareholding interest, have entered into a lockup and support agreement with Western Copper. Additionally, Lumina chairman Ross Beaty will join Western Copper’s board and sit as co-chairman along with its president and CEO Dale Corman.
Lumina Resources, which was formed in mid-2005 when Lumina Copper was restructured into four companies based on geographic landholdings, brings three projects to the table: Hushamu in British Columbia, Redstone in the western Northwest Territories and the Casino deposit in the Yukon.
The Hushamu porphyry copper-gold-molybdenum project sits within the northern Vancouver Island Copper Belt that also hosts the now closed open-pit Island Copper mine operated by BHP Billiton (BHP-N) predecessor company BHP-Utah Mines from 1971-1994. Hushamu hosts a measured and indicated resource of 231 million tonnes averaging 0.28% copper and 0.3 gram gold per tonne plus another 53 million tonnes of inferred resource at similar grades.
The Redstone copper-silver project, discovered in the early 1960s, has an inferred resource of 34 million tonnes grading 3.9% copper and 9 grams silver per tonne, using a 3% copper cutoff.
At Casino, a 2004 technical study reviewed 964 million tonnes of 0.22% copper, 0.24 gram gold and 0.02% molybdenum in the porphyry deposit.
Western Copper was formed in May as a spinoff from Western Silver, which was acquired by Glamis Gold (GLG-T, GLG-N). It holds the Carmacks oxide copper project in the Yukon and the Sierra Almoloya property in Mexico.
Historical estimates at Carmacks indicate an open-pit minable reserve of 13.3 million tonnes grading 0.97% copper (not compliant with National Instrument 43-101). In addition to drilling focused on building resources, Western Copper expects to have a feasibility study completed by early 2007, with production anticipated in 2008.
The Sierra Almoloya project, under option to Queenston Mining (QMI-T, QNMNF-O), is situated in the Central Mexican Silver Belt in a prospective area for polymetallic carbonate replacement deposits.
The combined companies will enjoy a treasury of almost $40 million and a property portfolio with a significant copper and gold resource inventory.
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