NovaGold Resources Inc, is making a bid to to buy out Copper Canyon resources Ltd., a share-exchange deal worth $34.1 million.
NovaGold, which is a partner in the proposed Galore Creek copper-silver-gold mine in northern B.C., has offered to acquire all the outstanding shares of Copper Canyon on the basis of a fraction of a NovaGold common share. The offer represents a 41.8 per cent premium based on the closing price of Copper Canyon last Friday.
Copper Canyon's principal asset is 40 per cent joint venture interest in the Coppery Canyon copper-silver-gold property next to the Galore Creek project. A subsidiary of NovaGold owns the remaining 60 per cent of the Copper Creek project.
NovaGold said it believes its proposed offer provides Copper Canyon shareholders several benefits in addition to an attractive premium.
Copper Canyon shareholders will have continued upside exposure to the Galore Creek project and will gain exposure to a world-class portfolio of North American gold and copper-gold projects.
NovaGold is partnered with Teck Resource on the Galore Creek project.
The company is expected to release a new pre-feasibility study for Galore Creek next year.
Galore Creek Mining has been reviewing a number of new project construction scenarios for the project to expand output and relocate facilities to allow for easier construction and future expansion.
The pre-feasibility study will provide capital cost estimates using higher copper and gold prices than used in previous studies, as well as permitting, construction and production timelines.
The project was permitted earlier, but some of the project changes would require new permitting.
The Galore Creek project was put on hold in late 2007 when construction costs for the gold, copper and silver mine more than doubled to $5 billion.
The mine, which had been expected to be complete in 2012, had been hailed by the B.C. mining community as a confidence booster as it was the first new major metal mine to start construction in a decade in the province.
It was also touted as having benefits throughout the North in terms of work and supplies, including for Prince George, considered a supply and service centre for northern mining operations.
