Imperial-Taseko Battle for bcmetals Heats Up

Vancouver — Imperial Metals (III-T, IPMLF-O) recently agreed on terms of its planned takeover of bcMetals (C-V, BMTLF-O) with the junior, only to see a revised competing offer come forward from Taseko Mines (TKO-T, TGB-X).

Imperial has boosted its previous all-cash offer to $1.10 per bcMetals share plus 2 for any “out-of-the-money” securities. In return, all bcMetals directors and officers have indicated they will tender to the new offer and will recommend that shareholders do likewise.

BcMetals’ board also intended to formally recommend rejection of the competing $1.05-per-share offer put forward by Taseko in early November. However, soon after the friendly agreement between Imperial and bcMetals was announced, Taseko upped its bid to match the $1.10 offer, citing a sooner payout for those that tender to its offer.

The initial 95-per-share offer launched by Imperial in early September was subsequently withdrawn after a couple of months due to “certain risks and uncertainties” that could have arisen from bcMetals’ implemented shareholder’s rights plan. Under the mechanism adopted by bcMetals’ board of directors in mid-October, any person or group acquiring more than 20% of the company’s shares would trigger a provision allowing shareholders to purchase additional shares at a 50% discount to market price, causing significant stock dilution and making the takeover more costly. BcMetals recently allowed its rights plan to expire.

Imperial’s bid is conditional on acquiring 66.67% of bcMetals’ shares. It is also contingent on termination of bcMetals’ agreement with Hong Kong-based Global International Jiangxi Copper Mining to form a limited partnership for development of the Red Chris copper-gold deposit.

To counter, Taseko has amended conditions in its offer. It has dropped its requirement for a settlement with minority shareholders of bcMetals’ subsidiary American Bullion Minerals and has also lowered its minimum tendering threshold from 66.67% to 50% plus one. The bid was set to expire on Jan 10.

From its earlier offers, Imperial already holds almost 7.4 million shares of bcMetals, about 19.25%, while Taseko reports holding about 1.8 million bcMetals shares, representing 4.67%.

BcMetals’ Red Chris copper-gold porphyry deposit, located near Iskut in northwestern British Columbia, 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 ounces gold). Additional measured, indicated and inferred resources outside the pit shell are 574.8 million tonnes at 0.32% copper and 0.28 gram 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.

More than $30 million has been spent on Red Chris, including the completion of a bankable feasibility study and receipt of necessary environmental approvals. A US$110-million debt financing has also been arranged through Investec Bank (UK).

Subsequent to the revised takeover offers, bcMetals announced a planned private placement financing of up to $2 million. It will be comprised of units, to be priced at $1.05 each, consisting of a common share and a half-warrant with full warrants exercisable at $1.09 for one year. Funds will be earmarked for general working capital, specifically professional and advisory fees incurred in negotiating with its suitors.