LionOre’s MPI takeover complete (January 03, 2005)

Mid-tier base metals producer LionOre Mining International (LIM-T) will move to a compulsory acquisition of Australian nickel producer MPI Mines after almost 95% of MPI’s shares were tendered to its takeover offer.

LionOre bid A$1 in cash plus 0.1675 of a LionOre share for shares of MPI in mid-October. On Dec. 7, LionOre extended the offer deadline to Dec. 22 and made the offer unconditional on Dec. 13. The MPI board, which had recommended the LionOre offer and locked up about 20% of the shares for the bid, resigned the next day to make way for LionOre appointees.

The offer valued MPI at A$2.23 ($2.11) per share.

MPI owns 80% interests in two projects in Western Australia: the Black Swan nickel mine, near Kalgoorlie, which is forecast to produce 12,000 tonnes nickel in concentrate in 2005, and the Honeymoon Well project, near Mt. Keith. Finnish-American nickel refiner OMG Kokkola Chemicals holds the minority interest in both projects.

Honeymoon Well, with a 131-million-tonne indicated resource grading 0.8% nickel, will be the subject of a metallurgical testing program and feasibility study. LionOre believes its Activox hydrometallurgical process, currently undergoing testing at LionOre’s Tati nickel mine in Botswana, may improve the economics of developing Honeymoon Well.