Dragon Capital Buying Tiberon for Vietnam's Nui Phao Mine
By Romina Maurino
19 Dec 2006 at 10:00 AM EST
resourceinvestor.com
TORONTO (CP) -- Tiberon Minerals Ltd. [TSX:TBR] is set to be acquired by private-equity firm Dragon Capital Management Ltd., a major shareholder, in a C$251-million deal to help develop the Nui Phao mine - the largest tungsten/fluorspar producer outside China.
Dragon said Tuesday it will offer C$3.65 a share for the 87.8% stake in Tiberon it doesn't already own, a bid that values all of Tiberon at about C$286 million.
That's a 53% premium over the closing share price of Tiberon on Oct. 17 - a day before the company announced it had been approached about a possible deal.
Fluorspar is used in refrigerants and aluminum production. Tungsten is used in steel alloys and electric light filaments.
''Given that Dragon Capital is a dedicated Vietnamese fund manager with excellent relationships within the country, it is extremely well-positioned to continue to the development of the Nui Phao tungsten/fluorspar mining project,'' Tiberon CEO Mario Caron said during a conference call Tuesday.
''Dragon Capital's commitment to Vietnam will ensure the timely and socially responsible development of this world-class deposit.''
Tiberon has been working to develop the mine, but has run into opposition from the Vietnamese government over the company's plan to expand its stake in Nui Phao.
In September, the Vietnamese Ministry of Planning and Investment said it wanted the original ownership ratio to continue, with Tiberon owning 70% and Vietnamese joint-venture partners holding 30%.
''The fact (is) that Dragon is a Vietnamese-based company, they have been in the country for in excess of 10 years, so definitely they have a local flavour,'' Caron said.
''They have an excellent reputation within the country, they have now funds under management specifically investing in Vietnam that exceed a billion dollars - so they are a significant force and they probably have additional lobbying power than we would have on our own.''
The Nui Phao project is the largest mining project now under development in Vietnam and is scheduled to begin production in early 2009. It contains over 55 million tonnes of proven and probable reserves, also making it one of the largest tungsten-fluorspar deposits outside China.
That may bode well for its prospects as demand from that country, which has been producing and consuming steel at a record pace, continues to pick up speed.
For now, CMC Cometals, a division of U.S.-based Commercial Metals Co., has agreed to buy all of Nui Phao's projected acid-grade fluorspar output for the first three years of production. Commercial Metals is one of the world's leading marketers and distributors of raw materials.
Tiberon's board has unanimously recommended that its shareholders accept the offer and senior officers and board members have agreed to tender their shares and options to the offer, representing about 11% of the company's stock.
The bid will require approval of two-thirds of Tiberon shareholders, as well as regulatory approval and is expected to close in mid-February.
Caron said the mine's current team will remain intact, while Tiberon's management ''will probably stay on with Dragon on an ongoing basis.''
Dragon, an investment banking institution with an exclusive focus on Vietnam, has agreed to pay a US$10-million break fee to Tiberon under certain circumstances if the deal doesn't go through.
Shares in Tiberon rose three cents to C$3.53 in mid-afternoon trading on the Toronto Stock Exchange. They had been halted Monday.
© The Canadian Press 2006 |
