Corriente Resources Is Involved In Protracted Talks Which Should Lead To A Bid For The Company
By Charles Wyatt
minesite.com
Not often one gets to write about a company whose shares are higher than they were last year, but Canadian-listed Corriente Resources is just such a one. A year ago the shares were C$5.20 and they subsequently fell, despite a rally in September, down to a low of just over C$2.00. Now they are C$6.20 having gone up in an almost straight line since December. So what is the reason? Quite simply it is because the company decided at the beginning of last year that it needed a partner for its Panantza – San Carlos copper project in Ecuador and a marketing process was set in motion under the direction of a team from Citi and Canaccord-Adams. By July confidentiality agreements had been secured with interested companies and they had been guided through the electronic data room.
At that time Ecuador was essentially a no-go area for mining companies under President Correa who came to power at the end of 2006. A new Mining Law was promised so meetings were held with senior government officials in Quito so that interested parties could get a first-hand idea of the intentions of the government of Ecuador. These meetings were part of in-country due diligence visits from interested industry parties from around the world, all of whom had the capability of advancing a multi-billion dollar copper district. As part of the ongoing dialogue with the Government, Corriente’s senior management in Ecuador had met the President who had reassured them about the future of mining saying, “I have a vision of responsible mining that will bring to the Ecuadorian people the benefits of resource development. Mining will go ahead in Ecuador and our role in government is to ensure such development is fair to all stakeholders, including the local communities”.
Quite right too, and Ken Shannon, the company’s chief executive had long made a point a keeping in close touch with these communities. In fact when some ghastly woman called Joan Kuyek from an NGO thingy called Mining Watch Canada had tried to stir up trouble against development of the Mirador copper project, she either neglected to tell the local tribes what she was doing, or underrated their intelligence. Anyway she was sent back home to Quebec with her tail between her legs when they demanded, amid world-wide publicity, that her outfit should pump money into their region on a similar scale to that expected from Corriente Resources’ Mirador copper project.
Last July the discussions were with a number of potential partners for the company's Panantza–San Carlos project. Corriente holds a 100 per cent interest in four known copper and copper-gold porphyry deposits on the Corriente copper belt that are being strategically developed as the Mirador project, which includes the Mirador Norte deposit, as well as the Panantza-San Carlos project for which NI 43-101 Technical Reports have been filed. The company also holds 100 per cent of concession interests covering approximately 430 square kilometres on the same belt, in which six additional copper exploration targets have been identified. Taken together, the known project deposits and exploration targets represent a potential long-term district development opportunity for large-scale copper-gold mining in southeast Ecuador.
It is no great surprise, therefore to find that by December Ken Shannon was able to announce that things had changed and Corriente was entering into a period of exclusive negotiations with a selected party and the deal now on the table was a bid for the whole company. These talks were expected to last until the end of March, but on 31 March he confirmed that negotiations were still in progress and had advanced significantly. No deal had yet been agreed, but the betting is that the chosen partner is either a western multi-national or a Chinese company. With either one talks are bound to take time so it is a great advantage to Corriente that during this time the price of copper has risen and its subsidiary in Ecuador has received an official notice signed by Minister Derlis Palacios Guerrero of the Ministry of Mines and Petroleum which states that the company is authorized to reinitiate its field operations.
So well done to Ken Shannon for remaining patient throughout these protracted talks. His patience should be rewarded when the outcome is known and this will be to the benefit of shareholders. With around C$80 million in the treasury and an excellent Ecuador-based development team in place, Corriente is well-positioned to continue working with the Ecuador Government to develop a responsible mining industry. These facts will weigh heavily in its favour during the remaining negotiations. Until he can announce the deal, however, there is not much else that Ken can say. |
