Lundin Mining (LUN-T, LMC-X) is in a better position to acquire Chariot Resources (CHD-T, CHDSF-O), now that shareholders in the Toronto-based junior have rejected a poison pill proposal.
The plan, put forward by Chariot’s board, was voted down on July 23, with the help of Lundin’s nearly 20% holding in the company.
Acquired in its takeover of Rio Narcea Gold Mines (RNG-T, RNO-X), launched in April, Lundin has roughly 61 million, or 19.9%, of Chariot’s shares. The company used its voting block to shoot down Chariot’s motion.
Chariot says Lundin’s 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 against.
Chariot holds a 70% interest in the Marcona copper property, in Peru, which it is developing towards the feasibility stage. Korea Resources Corp. and LG-Nikko Copper hold the remainder.
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.
However, 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, he added.
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 averaging 0.6% copper for 1.7 billion lbs.
Chariot plans to begin prod- uction by 2009, with ore initially coming from the higher-grade Magnetite Manto deposit, which sits just 1 km west of Mina Justa.
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