Anaconda Mining bids for New Island Resources

Anaconda Mining’s (ANX-T) all-share takeover bid for New Island Resources (NIS-V) “reflects full value” for New Island’s assets, the Toronto-based company says. The news sent New Island shares up 42.9% to close at 10¢ per share.

Under the offer, New Island shareholders will receive 0.33 of an Anaconda share for each New Island share tendered.

The offer values New Island at 10.83¢ per share, representing a 54.8% premium based on the June 10 closing prices for each company. Shares of New Island closed at 7¢ on June 10, while Anaconda’s shares closed at 32.5¢.

“The deal enables New Island shareholders to participate immediately in the Pine Cove gold mine cash flow versus waiting 12-18 months until after Anaconda’s capital expenditures are paid back,” Anaconda said in a press release. “New Island shareholders will not suffer further significant dilution during the capital payback period as a result of enjoying immediate access to cash flow from the Pine Cove mine.”

As operator and pursuant to a joint-venture agreement with New Island, Anaconda is earning a 60% interest in Pine Cove by advancing it into commercial production. Gold was first poured at Pine Cove in July 2008, after which it has been in an extended commissioning phase.

The advanced Pine Cove project is near Baie Verte, Nfld., and Anaconda believes there is potential to find more gold resources from the Pine Cove project and other satellite deposits in the area. It also believes New Island shareholders will benefit from exposure to its iron ore assets in Chile.

The offer will remain open until July 19 and follows an announcement by New Island on June 3 that it had entered into a letter of agreement for a “corporate combination” with Mountain Lake Resources (MOS-S). Under that agreement, New Island was to have become a wholly-owned subsidiary of Mountain Lake. (New Island shareholders were to have exchanged each of their shares for one new share of Mountain Lake.)

Harold Wareham, New Island’s president, could not be reached for comment by presstime.

The latest bid news pushed Anaconda shares down 3¢ or 9.2% to close at 29.5¢ per share.



Republish this article

Be the first to comment on "Anaconda Mining bids for New Island Resources"

Leave a comment

Your email address will not be published.


By continuing to browse you agree to our use of cookies. To learn more, click more information

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.