Romios dumps Copper Canyon

Vancouver — Citing project valuation concerns, management of Romios Gold Resources (RG-V, RMIOF-O) has decided against a planned merger with Copper Canyon Minerals (CPY-V, CAYRF-O) that would have seen the companies combine British Columbia copper and gold projects.

The proposed merger would have seen Romios shareholders receive one share in the new company for each share held, while Copper Canyon shareholders would have received 1.5 shares. Romios says that after a due diligence review of Copper Canyon’s project, it decided the property was overvalued in the proposed share exchange ratio.

Copper Canyon was to contribute its namesake project in northwestern B.C., which contains an inferred resource of 164.8 million tonnes of 0.35% copper, 0.54 gram gold per tonne and 7.2 grams silver per tonne. the property is adjacent to NovaGold Resources’ (NG-T, NG-X) large Galore Creek copper-gold deposit.

Romios’ property portfolio consists of nine projects encompassing about 250 sq. km in the Galore Creek area, adjacent to both NovaGold’s and Copper Canyon’s projects. It recently tabled an inferred resource estimate of 1.4 million tonnes grading 4.43 grams gold, 0.22% copper and 6.4 grams silver (using a 2-gram gold-equivalent cutoff grade) on the Northwest zone at its Newmont Lake property.

The project area has received attention following a recent announcement that NovaGold is partnering with Teck Cominco (TCK.B-T, TCK-N), on a 50-50 basis, to develop its Galore Creek copper-gold deposit.

NovaGold holds an option to acquire up to an 80% interest in the Copper Canyon property for $3 million in exploration spending, total payments of $1.25 million, 296,000 shares and completion of a feasibility study by October 2011.

With NovaGold having secured mining giant Teck Cominco as a joint-venture and financing partner, some see Copper Canyon Resources eyeing faster development of its property — possibly including its project as a satellite deposit to NovaGold’s. There is also some speculation that the Galore Creek partners could seek to take over Copper Canyon to unify the land package and secure surface rights.

Copper Canyon Resources was created in mid-2006, spun out of Eagle Plains Resources (EPL-V, EGPLF-O) to hold the Copper Canyon project as well as the Abo and Severence properties in southwestern B.C. and central Yukon, respectively.

Romios also holds projects in Nevada and Ontario and has about $3 million in exploration cash earmarked for its northwestern B.C. projects this year.