The fallout from Chariot Resources (CHD-T) shareholders rejecting a poison pill proposal on July 23, is that Lundin Mining (LUN-T, LMC-X)) is in a better position to acquire the Toronto-based junior.
Via its acquisition of Rio Narcea Gold Mines Lundin ended up with roughly 61 million shares or 19.9% of Chariots shares. The company used its voting block to shoot down Chariot’s motion.
Chariot said Lundins vote represented 74% of those that voted against the poison pill.
The final tally had 68.8 million shares cast in favour of the plan and 81.3 million going against.
Chariot holds a 70% interest in the Marcona copper property in Peru which it is in the midst of pushing towards feasibility. Korea Resources Corporation and LG-Nikko Copper hold the remaining 30%.
Blackmont analyst, George Topping, told the Financial Post that the failure of the poison pill opens the way for Lundin to make an offer for all of Chariot.
But, Topping said, the 68 million votes cast in favour of the poison pill will send a message to Lundin that it will have to make a competitive bid to take over the company and its key Marcona asset.
With a 0.3% copper cutoff, Mina Justa — the most defined and largest known deposit at Marcona — has an indicated resource of 347 million tonnes grading 0.71% copper for 5.4 billion lbs. copper, and an inferred 128 million tonnes grading 0.6% copper for 1.7 billion lbs.
Chariot plans to be in production by 2009, with initial ore coming from the higher grade Magnetite Manto deposit which sits just 1 km west of Mina Justa.
In Toronto on July 25 Chariot shares were up nearly 2% or 2 to $1.25 on 2.3 million shares traded on a day when copper prices fell by 5 to US$3.57 per lb.
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