UPDATE - Cambior bids to get all of big niobium mine
Wednesday April 21, 12:57 pm ET
(Recasts, updates share prices. Changes dateline, previous TORONTO. In U.S. dollars unless noted)
VANCOUVER, British Columbia , April 21 (Reuters) - Gold miner Cambior Inc. (Toronto:CBJ.TO - News) made a C$64 million ($47 million) friendly all-share bid for Sequoia Minerals Inc. (Toronto:SEQ.TO - News) on Wednesday, a move that would raise its stake in the world's third biggest niobium producer to 100 percent.
Canada's fifth biggest gold miner offered Sequoia shareholders 60 Canadian cents a share to get their 50 percent stake in the Niobec mine in Quebec, a strong generator of cash that Cambior will use to fund its gold operations.
The offer, a 28 percent premium on Sequoia's stock price of the past 20 trading days, sent Sequoia's stock 10 percent, or 5 Canadian cents, higher to 53 Canadian cents on Wednesday.
Cambior's stock was 6 Canadian cents weaker at C$3.58 on the back of a weaker gold price.
Niobium is a anti-corrosive, super-conductive specialty metal, which is used in applications from stainless steel arc-welding rods to pacemakers and artificial joints.
"Niobec provides us with stable cash flow that is complementary to our gold operations and our desire to be an unhedged gold producer," Bryan Coates, Cambior's vice-president of finance, told Reuters.
Last year, Cambior's 50 percent stake in Niobec accounted for $22.2 million, or 11 percent, of the miner's total revenue.
A hedge-book blow-out in 1999 nearly bankrupted Cambior, which is now furiously unwinding its forward gold sales. Anxious not to have to a hedge again -- a security measure often insisted on by lending banks -- Cambior is keen to boost cash-generative activities to help it fund its gold expansion.
The mid-sized producer last month poured its first gold at its new Rosebel mine in Suriname, a development that will help Cambior hike output by a third this year to 705,000 ounces.
Sequoia shareholders will receive one Cambior share for 6.3 Sequoia shares. Cambior will issue about 17.2 million common shares to Sequoia shareholders, who will vote on the deal before July.
($1=$1.36 Canadian)
