PacMin posts profit (September 17, 2001)

Vancouver — The subject of a $170-million take over target, Teck‘s (TEK-T) Australian gold mining arm, PacMin Mining, tabled a net profit of A$7.2 million for the fiscal year ended June 30.

The company produced 221,039 oz. of gold during the year with the Tarmoola mine contributing 155,447 oz., down from 180,000 oz. in 2000. The newly constructed A$40 million Carosue Dam operation in Western Australia added 65,592 oz. At June 30, PacMin held a stake in resources totaling 127.7 million tonnes grading 1.72 grams gold per tonne for just over 7 million oz. PacMin’s equity share tallies 6.64 million oz. The company realized an average gold price of A$537 per oz. in the period, some A$36 per oz. above the average spot price over the term.

Last month, gold and tantalum producer Sons of Gwalia (SGW) tabled a $170-million take over bid for the company. The share swap offer would see SGW acquire all of PacMin’s ordinary shares in consideration of five SGW shares for every 28 PacMin shares. The Australian-based company has also offered to acquire all of PacMin’s redeemable converting preference shares, which are all held by Teck, for A$6.10 each, in cash.

Teck currently holds 97.45 million shares, or 74% of PacMin ordinary shares and 7.7 million preferred shares, giving the diversified miner an 80% equity stake in PacMin.

Teck is considering the offer, which is subject to SGW being granted 90% of PacMin’s shares.