Zinifex Gets 95% of Wolfden

Zinifex (ZFEXF-O, ZFX-A) plans to make a compulsory acquisition of the remainder of Wolfden Resources (WLF-T, WLFFF-O), now that 95% of the shares have been tendered.

Zinifex is paying $3.81 per share to take over Wolfden, which holds a portfolio of base metal and gold projects in the Arctic. The takeover values Wolfden at $338 million.

Zinifex owns the Century and Rosebery zinc mines in Australia, and four smelters, two in Australia and one each in the Netherlands and the United States. In its takeover of Wolfden, Zinifex sought Wolfden’s zinc-copper projects in Nunavut, including High Lake and Izok Lake. High Lake has a measured and indicated resource of 17.2 million tonnes at grades of 2.25% copper, 3.35% zinc, 0.31% lead, 0.95 gram gold and 69.7 grams silver per tonne, in three zones; the largest, the West Zone, was discovered by Wolfden in 2003. Izok Lake has an indicated resource of 14.4 million tonnes with average grades of 3.79% copper, 6.4% zinc, 0.27% lead and 54.2 grams silver per tonne.

Both Izok, discovered in 1975, and High Lake, discovered in 1956, have been kept from production by high logistical costs for Arctic development. Feasibility studies, including an all-weather road to Coronation Gulf, have put the capital cost of developing Izok at $539 million and High Lake at $333 million. The small but high-grade Ulu gold deposit, also part of Wolfden’s portfolio, could be developed for another $61 million (T.N.M., July 14-20/06).

Wolfden says its shareholders should see payment in cash for the shares by May 11.

Zinifex, which was created out of the ashes of insolvent Pasminco, has also signed a final agreement to combine its smelting business with that of Umicore (UMICF-O). The new company, to be called Nyrstar, would have ownership split about 60% to Zinifex and 40% to Umicore, but would be taken public after it is formed. Zinifex shareholders are to be asked to approve the deal in July, which would allow the company to be created in September.