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Gold/Mining/Energy : Winspear Resources -- Ignore unavailable to you. Want to Upgrade?

To: Sapper who wrote (26019)	6/27/2000 7:08:00 AM
From: don jackson	Read Replies (1) \| Respond to of 26850

Today's Globe and Mail report De Beers bids for NWT diamond miner Hostile takeover offer boosts Winspear stock De Beers Consolidated Mines Ltd. has made a hostile $259-million takeover bid for Winspear Diamonds Inc. in an effort to expand its worldwide diamond mining activities to Canada. "We're interested in becoming the operator of a diamond mine in Canada as soon as possible," said Tom Beardmore-Gray, senior vice-president of De Beers Canada Corp. in Vancouver. De Beers plans to carry out a feasibility study on the $241-million Snap Lake project once the takeover is completed. De Beers has spent decades quietly exploring for diamonds in Canada, but it has yet to find a mineable deposit. In response to the cash offer of $4.25 a share, Winspear stock jumped $1.77 to $4.17 on the Toronto Stock Exchange. In a press release, Winspear described the offer as "opportunistic, hostile, [and] highly conditional," and one that does not reflect the underlying value of its shares. Windspear president Randy Turner could not be reached for comment. "We continually review projects all around the world," Mr. Beardmore-Gray said when asked about the timing of the bid. "It's an ongoing process." He said the offer represents "good value," given that the Snap Lake project is only at an early stage of planning. The offer will be made through a wholly owned Canadian subsidiary of De Beers Centenary AG, the Switzerland-based diamond marketing division of South Africa's De Beers. Vancouver-based Winspear owns 67 per cent of the Camsell Lake joint venture where the Snap Lake project is located, and Toronto-based Aber Resources Ltd. owns 33 per cent. The property is 220 kilometres northeast of Yellowknife. De Beers said its takeover offer is conditional on Winspear withdrawing its poison pill to allow the takeover to proceed, and acceptance by holders of at least 50.1 per cent of the shares. It also said that Winspear must withdraw a proposed $20-million financing. Winspear's management is also facing some unhappy shareholders over new stock options, said one mining analyst who declined to be named. A recent information circular disclosed that during the past year Winspear has issued incentive stock options to purchase 2.9 million shares. In total, stock options to purchase a total of 4.6 million common shares are outstanding, of which 3.2 million options have been issued to insiders. Winspear has 51.6 million shares outstanding. Mining analysts say De Beers has been interested for some time in Snap Lake, and that it prefers building a mine in Canada, rather than facing the political and economic problems of Russia and South Africa. De Beers has discovered about 200 kimberlite pipes in Canada, a geological feature often associated with the presence of diamonds. It has not, however, found a significant diamond deposit. "You can say that nature has been a little unkind," Mr. Beardmore-Gray said. But the company said yesterday that it has several Canadian projects in advanced stages of exploration. Those include a site in Northern Ontario and a joint venture in the Northwest Territories with Mountain Province Mining Inc. of Vancouver, he said. "The envisaged mine at Snap Lake in the Northwest Territories is potentially the first underground diamond mine for Canada," Richard Molyneux, president and chief executive officer of De Beers Canada, said in a press release. De Beers has expertise operating underground diamond mines. Canada's first operating diamond mine, the $860-million Ekati mine, is an open-pit mine in the Northwest Territories. It is 51 per cent owned by Broken Hill Pty. Co. Ltd. of Australia and 29 per cent by Dia Met Minerals Ltd. of Kelowna, B.C. The nearby Diavik project in the Lac de Gras area, which is being developed at a cost of $1.3-billion, will also be an open-pit diamond mine in its first few years of production before an underground phase is developed. Diavik is 60 per cent owned by Rio Tinto PLC of London and 40 per cent by Aber Resources.