Jinchuan to buy Tyler

China’s insatiable appetite for resources is putting more Canadian junior exploration companies on the menu.

The Jinchuan Group, China’s largest producer of nickel, cobalt and platinum group metals and a major copper producer, will snap up Canadian juniorTyler Resources(TYS-V, TYRRF-O) for $1.60 per share in cash.

Tyler is one of the most active Canadian junior exploration companies in Mexico and its Bahuerachi property in Chihuahua state is rich in copper, zinc, molybdenum, gold and silver.

Jinchuan’s offer values Tyler at about $214 million and is a 116% premium to Tyler’s closing price on Oct. 18, the last trading day prior to the announcement of an unsolicited offer for the company byMercator Minerals(ML-T, MLKKF-O). It also represents a 60% premium to Tyler’s most recent closing price on Jan. 4.

Tyler’s board rejected a takeover bid from Mercator Minerals latelast year that valued the company at $139 million. On Oct. 19, Mercator offered 0.113 of a share for each Tyler share.

“In response to Mercator’s hostile bid, we began an active and thorough process to identify a range of value enhancing alternatives for the company,” said Tyler chairman Alan Craven in a prepared statement.

“We received serious interest from a number of parties,” he said. “In the end, Jinchuan came forward with the best offer. . . (and) has the unanimous support of the Tyler board.”

For its part, Jinchuan is hungry for Tyler’s principal asset, the Bahuerachi polymetallic porphyry deposit. Since 2004, Tyler has drilled more than 52,000 metres of combined diamond and reverse-circulation holes.

A revised resource estimate for Bahuerachi should be available later this month and a prefeasibility study based on the updated resource estimate — incorporating all new drilling information generated from May to December 2007 — will be completed later this year.

According to its preliminary economic assessment report dated Nov. 8, the Bahuerachi main deposit, at a 0.2% copper cutoff grade, has a measured and indicated resource of 524.5 million tonnes averaging 0.4% copper, 0.008% molybdenum, 0.03 gram gold, 4.03 grams silver per tonne and 0.55% zinc.

The deposit also has an inferred resource of 80.1 million tonnes grading 0.38% copper, 0.007% molybdenum, 0.02 gram gold, 3.11 grams silver and 0.45% zinc.

The economic assessment also indicated Bahuerachi could generate a pretax internal rate of return of 53%, a preproduction capital payback of less than two years and a net present value of US$1.9 billion at an 8% discount rate based on 3-year historical average metal prices, which are substantially lower than current prices.