Lonmin buys into Wallbridge (June 18, 2007)

Lonmin (LNMIF-O, LMI-L) has agreed to take a private placement that could give it an 18% shareholding in Wallbridge Mining (WM-T, WLBMF-O), and cements an existing alliance in the Sudbury camp.

Lonmin would get 10.8 million units consisting of a Wallbridge share and half a warrant, with a full warrant exercisable at $1.00 for three years. Exercising all the warrants would give Lonmin 18.2% of Wallbridge’s outstanding shares. Lonmin pays 60 per unit, putting $6.5 million into Wallbridge’s treasury. The unit price is at about a 25% premium to Wallbridge’s recent share price.

Under the agreement, Wallbridge must spend 60% of the proceeds of the issue on properties in the North Range of the Sudbury area of Ontario. After the initial expenditure, Lonmin will have an option to enter a joint venture on the 354-sq.-km North Range properties, which cover footwall rocks outside the main Sudbury intrusive structure. Lonmin also gets a right of first refusal, in force for five years, on Wallbridge’s Sudbury-area properties, though this is subordinate to Wallbridge’s existing agreements with other companies, including local majors CVRD Inco, part of Companhia Vale do Rio Doce (RIO-N) and Xstrata (XSRAF-O, XTA-L), and junior explorers Crowflight Minerals (CML-V, CMLGF-O) and Pele Mountain Resources (GEM-V, PMNHF-O), both of which have joint ventures with Wallbridge .