Noranda ups stake in Falconbridge

In the market to become the world’s largest diversified resource company, Noranda Inc. (TSE) has emerged with a 19.5% stake in Falconbridge Ltd. (TSE).

After weeks of intermittent buying, Noranda stopped just short of the 20% level which would allow the resource giant to include Falconbridge’s earnings in its own financial statements.

However, the 14,489,200 Falconbridge shares which Noranda bought for approximately $330 million, will represent a 22.2% interest when 9.2 million Falconbridge shares held by McIntyre Mines (TSE) are cancelled in October.

McIntyre’s Falconbridge shares were acquired as part of an agreement in which the nickel producer outbid Noranda for a 24.9% control block of its own shares from Placer Dome Inc. (TSE).

While analysts have predicted that Noranda will eventually seek control of the world’s second largest nickel producer, the company will increase its stake by no more than 380,000 additional shares, said Alan Thomas senior vice-president finance.

“Basically we’re finished for the moment,” said Thomas who called rumors that Noranda will increase its stake in Falconbridge to 50% “sheer speculation.”

He told The Northern Miner that Noranda has no immediate plans for Falconbridge other than to seek board representation.

So far, Noranda has paid an average $22.5 per share to become the nickel miner’s largest shareholder.