Checked in its bid for a 32% stake in Anvil Range Mining (ARO-T), Mineral Resources (MIC-T) says it has been “forced to re-evaluate” its offer for outstanding shares of the company.
Mineral Resources made its offer after Anvil Range suspended operations at its Faro lead-zinc mine in the Yukon. However, earlier this month, Cominco (CLT-T) introduced a complication by agreeing to take down a private placement of 4.1 million Anvil Range shares for a total of $9.4 million.
Following the placement, Cominco would hold 5.7 million shares or 28% of the company.
Reports in the daily press said Mineral Resources Chairman Clifford Frame was in Korea to talk to Anvil Range’s other major shareholder, Hyundai, in the hope of persuading the Korean industrial conglomerate to oppose the Cominco deal. Mineral Resources would only confirm that Frame was “in the Pacific” with the company’s president, John Byrne.
Frame said that if the placement were made, “there may be no point in proceeding” with Mineral Resources’ own offer of three shares in Mineral Resources (after a 50-to-1 consolidation) for four of Anvil Range. Mineral Resources was also prepared to exchange its own shares for Anvil Range debentures.
Mineral Resources objects that the placement deal means “giving up effective control of Anvil Range and diluting shareholders without giving any assurance it can finance the reopening of the Faro mine.” Frame also said that Mineral Resources might take its opposition to the Toronto Stock Exchange, arguing that the placement should be submitted to shareholders for a vote.
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