Big Paydays For Canplats, Corriente

In what may be a sign of a lively year ahead, the last trading week of 2009 was dominated by cash-rich bids for two Canadian juniors with advanced projects in Latin America.

• The phenomenal story of Canplats Resources’ rapidly growing Camino Rojo gold-silver discovery in Mexico took a turn for the green, as Goldcorp grappled with the tag team of Fresnillo and Newmont Mining to see who could stuff the most goodies into Canplats shareholders’ stockings over the holiday period.

The leading bidder has seesawed back and forth, with Goldcorp on top at press time, having last tabled a revised $317-million offer, mostly in cash.

The multi-million-ounce Camino Rojo deposit is a natural fit for Goldcorp, which has built its huge, new Penasquito polymetallic mine 50 km away.

Canplats shareholders are due to meet in Vancouver on January 14 to smile, slap each other on the back and vote on the latest offer.

• Corriente Resources’ decade-long adventure in the physical and political wilds of Ecuador is coming to completion, with two Chinese companies jointly bidding a cool $679 million in cash for the Vancouver-based company.

China Railway Construction and Tongling Nonferrous Metals Group will pay $8.60 in cash for every Corriente share in order to get the junior’s extensive portfolio of copper and copper-gold porphyry deposits. These are contained within the Mirador and Panantza-San Carlos projects developed in the mountainous jungles in country’s southeast, in the same region as Kinross Gold’s Fruta del Norte high-grade gold project.

Ecuador’s chronic political instability and periodic hostility to foreigners — which most recently affected miners when the government froze all mineral exploration and mine development in April 2008 — has served to scare off potential investment by major Western base metal miners.

As a result, the country is facing the prospect of increased copper mine development within its borders by less choosy and culturally attuned Chinese companies, which tend to have bare-bones operations characterized by low pay, low safety standards and minimal community reinvestment compared to those mines built and operated by Western companies.

• Just before Christmas, Rio Tinto accepted a US$2-billion offer by Amcor for the sale of the Alcan Packaging global pharmaceuticals, global tobacco, food Europe and food Asia divisions. The purchase has been cleared by the European Commission and is now awaiting clearance from the U.S. Department of Justice.

Rio Tinto notes that, since its debt troubles flared up in February 2008, it has announced asset sales of US$10.3 billion, and completed US$6.7 billion of that in 2008 and 2009. Transactions in the bag include Ningxia (aluminum), Potasio Rio Colorado (potash), Corumba (iron ore), Jacobs Ranch (coal), Alcan Composites and the Cloud Peak IPO.

Meanwhile in South Africa, Richards Bay Minerals (RBM) partners Rio Tinto and BHP Billiton completed their Broad Based Black Economic Empowerment transaction, selling 24% in RBM to Blue Horison Investments, which is made up of a group of seven separate business consortia, and will be joined by the Sokhulu, Dube, Mbonambi and Mkhwanazi communities that surround RBM’s activities.

• In Peru, the partners at the Antamina copper-zinc mine — Xstrata (33.75%), BHP Billiton (33.75%), Teck Resources (22.5%) and Mitsubishi (10%) — have announced a major expansion.

They will spend US$1.3 billion this year and next boosting Antamina’s daily throughput by 38% to 130,000 tonnes, and annual production of copper and zinc by 30% on completion in late 2011. The expansion is expected to be the largest private investment in Peru this year.

The expansion is possible thanks to Antamina’s robust reserve base, which rose by 77% in 2008. Mine life is now expected to continue until 2029.

• Using Thomson Reuters data, KPMG Corporate Finance found there were 2,110 M&A deals completed in 2009 involving Canadian companies, for a dollar value of US$129 billion. The number of deals was down only 4% from 2008 but the total deal values fell 20%.

About a third of all Canadian M&A deals were in the metals and mining sector, with a value of US$9.2 billion. Oil and gas accounted for 14% of the deals, worth US$70.7 billion — or a whopping 55% of total Canadian M&A deal values primarily because of Encana’s US$41.6-million Cenovus Energy spinoff.