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

To: russet who wrote (26501)	8/14/2000 12:32:01 AM
From: Andrew	Read Replies (1) \| Respond to of 26850

I think we are winning, us shareholders that is (ggg). I like the part about Canada's most promising diamond project (GGG). biz.yahoo.com De Beers may be forced to raise bid for Winspear By Lesley Wroughton TORONTO, Aug 13 (Reuters) - With the deadline for its hostile bid for Winspear Diamonds (Toronto:WSP.TO - news) looming, global diamond leader De Beers might be forced to sweeten its C$259 million ($175 million) cash offer if it wants control of Canada's most promising diamond project, mining analysts say. A source close to the deal said ``very few shares'' had been tendered by the weekend to the C$4.25 per share offer which expires at 8 p.m. EDT (0000 GMT) on Tuesday. ``I'd be very surprised if De Beers won this one,'' said David Duval, a Vancouver-based analyst and former mining consultant to the United Nations. ``I don't think De Beers has much of a chance of getting Winspear at C$4.25 unless they pull a rabbit out of their hat. This thing could drag on for a while,'' he added. De Beers is targeting Winspear's rich Snap Lake diamond project in Canada's Northwest Territories, as part of its new global ``supplier of choice'' strategy which aims to make it an exclusive supplier of rough stones to clients that will trigger demand on the retail level. For this to happen, De Beers, which mines about 40 percent of the world's diamonds by value from mines in southern Africa, must quickly increase its production through purchases of either existing or future mines. The miner has so far been unsuccessful in making significant discoveries in Canada, a country expected to produce about 10 percent of the world's diamonds by 2010, and Snap Lake will give it that necessary break into the market. De Beers also recently launched a A$522 million (US$303 million) hostile bid for Australia's Ashton Mining (Australia:ASH.AX - news), which will give it a 40.1 percent stake in the Argyle diamond mine, the world's largest by number of carats produced. Most analysts believe that De Beers' offer for Winspear is too low and does not fully recognise the potential of the project and would be more favourable closer to C$6-C$7. ``The current bid does not, in our view, recognise the value of the Snap Lake project which, as outlined in the MRDI Canada pre-feasibility study, has robust economic potential with a 2.1 year estimated payback,'' said Canaccord Capital analyst Graeme Currie in a published report. Other analysts feel that the bid, a 77 percent premium over Winspear's closing price in Toronto of C$2.20 on June 23, is sufficient. ``Winspear has traded at C$4.40-C$4.70 and at that price I thought there was a slim chance that De Beers was going to get anybody to tender, but it has come off in the past week to hit the bid price and below and I was getting more optimistic in terms of their chances of being successful,'' said Mike Curren, Merrill Lynch mining analyst in Toronto. Shares in Winspear closed at C$4.17 in Toronto on Friday, while De Beers ended at 179 rand on the Johannesburg Stock Exchange. Curren said shareholders would probably wait until the last moment to see if De Beers raised its bid or shifted the deadline before tendering their shares. De Beers has maintained its bid is ``fair and reasonable'' and cautioned Winspear shareholders to consider the impact on the share price if its bid fails. Winspear has fought aggressively to fend off De Beers and conducted a series of rigorous drilling programmes to show shareholders the value of their investment. An updated study of its September 1999 resource study released last Wednesday expanded Snap Lake's mineral resource to 44 million tonnes containing 68 million carats at a grade of 1.9 carats per tonne. ``De Beers is used to getting what it wants and at the end of the day it has the money. It has indicated it is willing to sell off its Anglo (American Plc) (quote from Yahoo! UK & Ireland: AAL.L) shares to finance the right acquisition,'' said Chaim Even Zohar, a Tel Aviv-based diamond consultant and editor of Diamond Intelligence Briefs. ``Whatever happens on Tuesday, it is unlikely to be the end of the story,'' he added. ($1 equals 1.48 Canadian) Email this story - View most popular stories emailed More Quotes and News: Ashton Mining Ltd (Australia:ASH.AX - news) Winspear Diamonds Inc (Toronto:WSP.TO - news) Related News Categories: Canadian Market News, US Market News