Rio, North bid for Musto

Shareholders of International Musto Explorations (TSE) are considering a new takeover offer.

Copper producer Rio Algom (TSE) of Toronto and Australian resources company North Ltd. have joined forces and are bidding $14.99 per share for all of Musto’s outstanding shares.

The bid tops an earlier offer by gold producer Placer Dome (TSE) worth $12.50 per share (T.N.M., April 10/95).

Musto’s board of directors, which earlier advised shareholders to tender their shares to the Placer offer, was telling shareholders at presstime to await a new communication.

At stake is a 50% interest in the large Bajo de la Alumbrera copper-gold porphyry property in Argentina. Musto and its project partner, MIM Holdings of Australia, are developing the project at a capital cost of about US$750 million.

Current reserves (all classes) stand at 752 million tonnes grading 0.51% copper and 0.65 grams gold per tonne. Annual production will average an estimated 180,000 tonnes copper and 640,000 oz. gold during the projected 19-year mine life.

The Rio-North bid is worth about $510 million. “Our share of the acquisition can be financed from existing cash balances,” Rio President Colin Macaulay said. “We anticipate that our share of development costs, after MIM has satisfied its earn-in funding obligation, can be financed from cash flows and undrawn lines of credit.”

North has interests in the mineral and forestry industries and in mining equipment manufacturing. Its affiliated mining companies are involved in iron ore, uranium, gold and copper projects.