Cominco (TSE) is making a $31.3-million takeover bid for RFC Resource Finance (TSE), whose primary asset is the Pend Oreille zinc-lead property in northeastern Washington state.
Cominco is offering $1.55 per share for the 20.2 million outstanding shares of RFC. Inmet Mining (TSE), which owns 73.4% of RFC’s shares, has agreed to tender all of its shares to bid and sell a related royalty interest to Cominco for $2 million.
Inmet’s president and chief executive officer, Klaus Zeitler, says the deal “is consistent with our strategy to focus our business on our core assets, and to rationalize our portfolio as opportunities permit.”
Robert Stone, chief financial officer for Cominco, says his company’s decision to buy RFC follows years of interest in the Pend Oreille project. With only 4-5 years of life remaining at the Sullivan underground zinc-lead mine at Kimberley, B.C., the company has been looking for replacement concentrate for its smelter in Trail. The Pend Oreille is fewer than 200 km away.
The property, a producer from 1938 to 1977, is an advanced exploration project at the feasibility stage. Last year’s drill program boosted diluted minable reserves to 5.7 million tons grading 8.9% zinc and 1.34% lead, increasing the projected mine life to 11 years. There is potential for defining additional reserves to the northeast
A 1994 feasibility study estimated the rehabilitation of existing surface facilities and development of a 1,500-ton-per-day mine at a cost of US$33 million.
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