Imperial Metals Pulls Plug on Hostile Offer for bcMetals

Vancouver — Unable to stomach bcMetals’ (C-V, BMTLF-O) poison pill, Imperial Metals (III-T, IPMLF-O) has withdrawn its unsolicited 95-per-share bid for the junior.

In its decision, Imperial cited “certain risks and uncertainties” that would arise from bcMetals’ shareholders’ rights plan. Under the plan, adopted by bcMetals’ board of directors in mid-October, the acquisition of more than 20% of the company’s shares by any person or group would trigger a provision allowing shareholders to purchase additional shares at a 50% discount to market price — causing significant dilution and making a takeover more costly.

With about 6.9 million shares (about 18.1%) of bcMetals already tendered to Imperial, the company was close to triggering the poison pill.

Imperial’s recent application to the British Columbia Securities Commission (BCSC) seeking an order to cease trade any bcMetals securities issued under the shareholders’ rights plan was dismissed.

Imperial intends to honour its purchase commitment for all shares deposited under its bid now that bcMetals’ own BCSC application was denied.

That application, citing certain withdrawal right issues, sought to restrain Imperial from taking up and paying for shares.

The move now leaves Taseko Mines (TKO-T, TGB-X) as sole bidder for bcMetals with its planned $1.05 per share offer, although the company says it is re-evaluating its options in light of recent developments and uncertainties.

BcMetals hopes to convince shareholders to vote in favour of a planned alliance with Hong Kong-based Global International Jiangxi Copper Mining (GIJCM), forming a limited partnership for development of the Red Chris copper-gold porphyry deposit near Iskut, in northwestern British Columbia.

The GIJCM agreement would see bcMetals holding a 25% free-carried interest in the partnership for contributing Red Chris, while the Chinese company would acquire 75% in return for US$105 million and entering into an offtake agreement to purchase all produced concentrates from the proposed mine.

Red Chris hosts life-of-mine proven and probable reserves of 277.8 million tonnes grading 0.35% copper and 0.27 gram gold per tonne (about 2.1 billion contained pounds copper and 2.4 million contained oz. gold). Mining plans call for a conventional open-pit operation producing about 110 million lbs. copper and 75,000 oz. gold in concentrates annually over its first five years.

Shares of bcMetals closed even at $1.00 apiece following the news that Imperial had pulled its offer.