Rio sidelines De Beers in Ashton bid

London-based Rio Tinto (RTP-N) has received acceptances for 94.7% of the shares of Australia-listed Ashton Mining.

The British major has further extended its offer to Dec. 13 to allow the remaining shareholders the opportunity to accept the bid ahead of compulsory acquisition. Rio’s is the only offer available to Ashton shareholders, since De Beers Consolidated Mines (DBRSY-Q) formally withdrew from the bidding war.

At stake was Ashton’s 40.1% share of the Argyle diamond mine in Western Australia. Rio operates the mine and owns the remaining 59.7% interest. Argyle is expected to produce 28 million carats this year, with diamond sales projected at US$400 million.

Rio outmanoeuvred De Beers by making an eleventh-hour, unconditional, revised bid of A$2.20 per Ashton share. The bid was accepted by majority shareholder Malaysia Mining Corporation Berhad.

Even though De Beers’ bid of A$2.28 was higher, its offer was regarded as uncertain insofar as the company had been forced to extend the closing date twice while it awaited regulatory approval by Australia’s Foreign Investment Review Board and the Belgium Competition Council.

In related news, Ashton’s 68%-owned subsidiary, Ashton Mining of Canada (aca-t), has suspended a previously announced $2.25-million private placement of flow-through shares.

The subsidiary says it will decide whether to proceed with a flow-through financing after it receives results from a mini-bulk sample of the promising K252 kimberlite at the Buffalo Hills project in Alberta. Also awaited microdiamond results from the Perseus kimberlite sill discovery on the Ric property in Nunavut. Results from both projects are expected shortly.