Zijin bids for a slice of Tampakan

ZIJIN Mining Group Company has its gaze firmly set on a 37.5% stake in the massive Tampakan copper-gold project in the Philippines after slapping a friendly $A545 million takeover bid on the table for Indophil Resources.
Zijin bids for a slice of Tampakan Zijin bids for a slice of Tampakan Zijin bids for a slice of Tampakan Zijin bids for a slice of Tampakan Zijin bids for a slice of Tampakan

China's largest gold producer and third-largest copper producer is offering an all-cash bid of $1.28 per share for Indophil, which represents an 18% premium to the closing price of Indophil shares.

The proposal will take place through an off-market takeover bid and is subject to certain conditions, including a 90% minimum acceptance condition and regulatory approvals.

Indophil's board has unanimously recommended shareholders accept the offer in the absence of a superior proposal.

The jewel in the crown for Zijin, in terms of the takeover, is Indophil's 34.23% stake in the Tampakan copper-gold project in the Philippines.

Indophil also advised today that it would accelerate its acquisition of Alsons Corporation's 3.27% stake in Tampakan, which would potentially give Zijin a total 37.5% stake in the project.

Tampakan has a mineral resource of 2.4 billion tonnes containing an estimated 13.5 million ounces of gold.

The project is targeting an initial 20 years production at an average annual rate of 340,000t of copper and 350,000oz of gold with a cash cost estimated at less than US46c per pound of copper.

Today's news comes after Indophil revealed in October that it was in talks with interested parties over its stake in Tampakan.

"The Zijin proposal recognises Tampakan's inherent value and follows a comprehensive ownership review process in which the board, management and advisers have considered a range of strategic alternatives and proposals from interested parties," Indophil chairman Brian Phillips said.

"It is also a positive outcome for the project and the people of the Philippines - Zijin is well positioned to fund its share of Tampakan's capital expenditure estimate of $US5.2 billion."

Zijin has also entered into an agreement with Indophil's major shareholder and majority partner of Tampakan, Xstrata Queensland, over its 19.9% stake in Indophil.

"Zijin's offer for Indophil clearly demonstrates the attractiveness of the Tampakan project…" Xstrata Copper chief executive Charlie Sartain said.

"Xstrata welcomes the introduction of a joint venture partner with the capacity to support the advancement of the Tampakan project."

Zijin's bidder's statement is expected to be lodged by December 18.

The final feasibility study has begun at Tampakan, which is expected to be finished in the second quarter of 2010.

An environmental and social impact assessment for the project is on track to be completed by the end of 2010.

Shares in Indophil have jumped 11c, or 10%, to $1.195 in morning trade.

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