Inmet puts Troilus on block, Wolfden shares in sock (April 03, 2006)

As it closes its deal to sell several properties in Arctic Canada, Inmet Mining (IMN-T) has announced its intention to find a buyer or partner for its Troilus gold mine in north-central Quebec.

The company has retained CIBC World Markets to advise in the sale of Troilus, and Inmet said it would consider either an outright sale or a “business combination” with a gold company.

Inmet had previously agreed to sell Troilus to Homestake Mining, now part of Barrick Gold (ABX-T, ABX-N), but the sale fell through when Homestake refused to close, saying the available data on the mine did not allow it to do satisfactory pre-sale investigations. Inmet sued for breach of contract and was awarded a judgment of $88 million plus costs in lieu of specific performance. On appeal Inmet also received pre-judgment interest.

Inmet also closed its previuosly agreed sale of the Izok Lake, Hood River and Gondor properties in the western mainland of Nunavut to Wolfden Resources (WLF-T) for 13.5 million Wolfden shares, a transaction that values the properties at $50.6 million. The share issue gives Inmet an 18% stake in Wolfden and the sale agreement allows Inmet to maintain its interest in Wolfden’s future financings. Two Inmet appointees are to be nominated for the Wolfden board.

Inmet said its Wolfden stake was an investment only.

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