Guatemala

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Globe says mining giants rumoured to be eyeing Skye

2006-09-11 06:36 ET - In the News

The Globe and Mail reports in its Monday edition that Companhia Vale do Rio Doce, BHP Billiton and Xstrata are turning their acquisition sights to smaller Canadian base metal miners amid a shortage of new nickel supplies. The Globe's Andy Hoffman and inside poopmeister Andrew Willis write that unnamed sources say the global mining giants are considering bids for Vancouver's Skye Resources. CVRD's interest in Skye is the most advanced. CVRD is believed to be preparing a bid that could be in the range of $20 a share. BHP, however, may have the upper hand. BHP already has a 16.5-per-cent interest in Skye, which is developing the Fenix nickel project in Eastern Guatemala. BHP has its own operations in the country close to the Fenix project. Skye shares jumped 50 cents to $16.20 Friday in Toronto Friday. Skye stock was trading in the $3 range at the beginning of the year. Skye's market capitalization is $477-million. The Vancouver firm expects to produce up to 25 million pounds of nickel from the Fenix project a year beginning in 2008. The company says Fenix could produce up to 50 million pounds of ferro-nickel a year thereafter. Xstrata is mum on its possible interest in Skye.