Even the small draw spotlight at high copper prices
Fri Mar 30, 2007 3:54pm
yahoo.reuters.com
By Pav Jordan
SANTIAGO, March 30 (Reuters) - Amid the giant companies taking the spotlight at the 6th annual world copper conference in Chile this week, a few mining toddlers have caused a stir as they introduced themselves to potential investors.
Global copper prices are showing incredible endurance, holding levels that are several times production costs and driving copper-hungry markets to seek out new sources of output.
Small miners are happy to oblige, seeing hot prices as an opportunity to bring attention to their sometimes overlooked mines.
One of those is Canada's Candente Resources Corp. (DNT.TO: Quote, Profile , Research), owner of the Canariaco Norte copper project in northern Peru, which listed in Lima last month and is generating interest from potential buyers.
Candente Chief Executive Joanne Freeze closed out the CRU conference in the Chilean capital Santiago by urging hundreds of attending executives to invest in her company.
"The market is still open for a few hours," Freeze joked.
As it happens, she was surrounded by international media after her speech, with one man pushing past others to assure her that he was an investor.
Freeze says she's been approached by a lot of people to either sell her property or a share in it, but the price has never been right for the property she hopes to have in production by 2009.
Others like her, holders of small or medium-sized properties, could probably say the same of offers they have received.
She said Candente will go to markets soon to raise another $10 million in equity to cover costs as it awaits a bankable feasibility study that will allow her to put Canariaco into production.
On the other side of the coin, miners say available properties are simply overpriced.
"Probably our most difficult challenge is to find new things to buy to increase our production," said Jim Gill, the president and chief executive of Canada mid-sized miner Aur Resources (AUR.TO: Quote, Profile , Research).
"There are things out there that meet our criteria, but the problem is they are too expensive to purchase. The bid and the ask are too far apart."
Aur, with mines in Chile and Canada, is on the acquisition trail and Gill's criteria are for a mine that has at least a 10-year mine life and a minimum 15 percent return on capital.
The Candente property could fit that bill with what may become an asset producing more than 100,000 tonnes of copper per year, but Freeze said she has had no contact from Aur.
Also at the conference were Australia's Tamaya Resources Ltd., which owns the small Chilean copper mine Punitaqui (capacity 12,000 tonnes concentrate) and recently merged with gold miner Iberian Resources Ltd.
The mine is a fraction the size of Chile's Escondida copper mine, which produces nearly 1.3 million tonnes of copper per year and is owned by the world's largest miner BHP Billiton (BHP.AX: Quote, Profile , Research) (BLT.L: Quote, Profile , Research)
But with copper at more than $3 per pound, many miners say it is not a buyers market.
Tamaya managing director Michoel Fischer said the trick for any company to be attractive as a take-over target was to be efficient in a high or low price environment.
"When the prices are low and most businesses don't work well, that's when the bargains are available." |
