Blue Pearl Mining pays US$575M for Thompson Creek Metals; shares rise 30%
TORONTO (CP) - Shares in Blue Pearl Mining Ltd. (TSX
LE) rose sharply Tuesday after the company announced it will pay US$575 million for privately held Thompson Creek Metals. ADVERTISEMENT
Shares in the Toronto-based miner rose 30.1 per cent, or $1.18, to $5.10 in morning trading on the Toronto Stock Exchange, pushing the stock above its 52-week high of $3.95.
The deal with Thompson Creek Metals, which has two operating mines and concentrators and a metallurgical plant, would make Blue Pearl as one of the world's largest molybdenum producers.
Molybdenum, valued for its corrosion-resistant properties, is a key component in high-end steel alloys and pipeline steel.
Thompson Creek's operations include the Thompson Creek Mine and processing facility in Idaho and the Langeloth refinery in Pennsylvania, as well as a 75 per cent interest in the Endako Mine and processing facility in central British Columbia.
"The company believes the acquisition will transform Blue Pearl into the world's largest publicly traded stand-alone molybdenum producer and rank it among the top five overall molybdenum producers worldwide," Toronto-based Blue Pearl said Tuesday.
In addition to the purchase price, Blue Pearl is obligated to make contingent payments of up to US$125 million, depending on the future price of molybdenum. The current owners of Thompson Creek Metals will also be entitled to receive US$23.35 million in funds for accounts receivable molybdenum inventories.
Molybdenum production in 2006 for Thompson Creek Metals is expected to total about 26 million pounds at an average operating cash cost of US$4.12 a pound. The metal currently trades between US$28 and US$30 per pound.
To finance the deal, Blue Pearl said it has a commitment letter with UBS Investment Bank for a US$450-million long-term loan. Blue Pearl intends to fund the balance of the cash payment through an equity issue.
PS. Es war ja eigendlich mit Ansage
