Junior nickel miner gets $150m offer from China's Jinchuan

Crowflight Minerals has received an all-cash bid from China's largest nickel and cobalt miner, Jinchuan.

Author: Dorothy Kosich
Posted: Wednesday , 07 Apr 2010

RENO, NV -

Toronto junior nickel miner Crowflight Minerals (TSX: CML) announced Tuesday it has received an offer from Jinchuan Group Ltd , China's largest producer of nickel and cobalt, to acquire all common shares of Crowflight for a cash payment of $150 million.

The offer is subject to Jinchuan being satisfied with its due diligence review of Crowflight and is premised on Jinchuan obtaining 100% of the offtake of the Bucko Lake Mine.

Located near Wabowden, Manitoba, in the Thompson Nickel Belt, the Bucko Lake Nickel Mine resumed production about a month ago. Crowflight hopes to achieve its start-up target of 1,000 tpd of production for the second quarter of 2010, which expects to increase to 1,200 tpd during the second half of the year.

As part of Crowflight's offtake agreement with Xstrata, all nickel concentrates produced from Bucko are being shipped to Xstrata's smelter in Sudbury, Ontario.

The Bucko mine has 118 million pounds of contained nickel reserves and 93 million pounds of measured and indicated nickel resources. Crowflight also claims to hold the second largest land position in the Thompson Nickel Belt, which comprises over 800 square kilometers.

The Jinchuan offer would also include the future offtake of other Crowflight properties including advanced stage exploration properties located within 25 kilometers from the Bucko Deposit, including M11A, Apex, Bowden and Halfway Lake deposits.

Crowflight also owns two properties in the Sudbury Basin of Ontario, including the AER Kidd Project, located adjacent to FNX's Victoria Property.

Based on the current number of Crowflight common shares outstanding, Jinchuan's offer equates to 26-cents per share, a premium of 47.3% to the closing price of the TSX for the company's common shares as of April 2, 2010.

Jinchuan's nickel production is ranked fourth in the world, while its cobalt production ranks second in the world. The company's website has had an annual production capacity of 130,000 tons of nickel, 200,000 tons of copper, 6,000 tons of cobalt, 8,000 kilograms (282,191 ounces) of platinum group metals (PGMs).