Lumina merging into Western Copper

Vancouver – Latest in a series of industry consolidations sees Lumina Resources (LUR-T, LUMNF-O) merging into Western Copper (WRN-T, WCPCF-O) in an all share deal.

The pair of copper-focused juniors have agreed to combine whereby Western Silver will issue one common share for each Lumina share outstanding. The planned transaction, valued at about $26 million, represents a 63% premium on Lumina’s 20-day trading average based on both company’s September 15th closing price.

Officers and directors of Lumina, representing a 29.5% shareholding interest, have entered into a lockup and support agreement with Western Copper. Additionally, Lumina chairman Ross Beaty will join Western Copper’s board and sit as co-chairman along with its president and CEO Dale Corman.

Lumina Resources, formed in mid-2005 from the restructuring of Lumina Copper that was split into four companies based on geographic land holdings, brings three projects to the table: Hushamu in British Columbia, the Redstone in the western Northwest Territories and the Casino deposit in the Yukon.

The Hushamu porphyry copper-gold-molybdenum project sits within the northern Vancouver Island Copper Belt that also hosts the now closed open pit Island Copper mine operated by BHP Billiton (BHP-N) predecessor company BHP-Utah Mines from 1971-to-1994. Hushamu hosts a measured and indicated resource of 231 million tonnes averaging 0.28% copper and 0.3 gram gold per tonne plus another 53 million tonnes of inferred resource at similar grades. Additionally, drilling in 2005 intersected a wide zone of higher-grade gold mineralization (1 gram gold over 95 metres) in the NW Expo area of the project.

The Redstone copper-silver project, discovered in the early 1960s, has an inferred resource of 34 million tonnes grading 3.9% copper and 9 grams silver per tonne, using a 3% copper cut-off grade.

At Casino, a 2004 technical study reviewed 964 million tonnes of 0.22% copper, 0.24 gram gold and 0.02% molybdenum in the porphyry deposit.

Western Copper was formed in May 2006 as a spin-off company from Western Silver, which was acquired by Glamis Gold (GLG-T, GLG-N). It holds the Carmacks oxide copper project in the Yukon and Sierra Almoloya property in Mexico.

Historical estimates at Carmacks indicate an open-pit mineable reserve of 13.3 million tonnes grading 0.97% copper (non-NI43-101 compliant). In addition to drilling focused on building resources, Western Copper expects to have a feasibility study completed by early-2007. Permitting and development plans are also underway for the deposit with production anticipated to commence in 2008.

The Sierra Almoloya project, under option to Queenston Mining (QMI-T, QNMNF-O), is situated in the Central Mexican Silver Belt within a prospective area for polymetallic carbonate replacement deposits.

The combined companies will enjoy a strong treasury of almost $40 million and a property portfolio with a significant copper and gold resource inventory.

Lumina shares gained about 40% on the news to trade at the $1.00-level on strong volume of more than one-half million shares. Shares of Western Copper slipped about 6% to the $1.10-level.