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Australian firm Zinifex leaps into Arctic


Last updated 3/25/2007 at Noon

Canadian junior mining companies are increasingly the targets of friendly (and occasionally not-so-friendly) takeover bids, but it's more unusual for the purchaser to be located on the other side of the planet. That is the case for Ontario-based Wolfden Resources, which has agreed to a buy-out by Australia's Zinifex. Wolfden is developing projects in Nunavut, while Zinifex operates two mines and three smelters in Australia, as well as a smelter in the Netherlands and another in Tennessee.

Zinifex offered Feb. 19 to acquire all the outstanding shares in Wolfden for C$3.90 cash per share, which it reduced to C$3.81 a short time afterwards. "We believe Wolfden's advanced projects would represent an excellent fit with Zinifex's strategy to grow its mining business," said Zinifex's CEO, Greig Gailey. "The Izok and High Lake projects would meaningfully add to Zinifex's resource base and have the potential, if developed, to significantly extend Zinifex's mining profile. These are high-value polymetallic projects at an advanced stage, together with significant potential for upside from further exploration," he added.

Wolfden made further progress with its projects after Zinifex made its offer. On Feb. 21 the company announced that the Nunavut Impact Review Board had completed its screening of the High Lake project and determined that the project requires a public review in accordance with the Nunavut Land Claim Agreement. This decision "demonstrates continued support of the High Lake Project from regulatory authorities and represents another milestone in our steady progress towards building major infrastructure and the construction of the first major copper and zinc mine in the Kitikmeot region of Nunavut," said Ewan Downie, Wolfden's president and CEO.

In addition, Wolfden announced March 2 that it had completed the acquisition of the historic Lupin gold mine in Nunavut from Kinross Gold. Wolfden and Kinross agreed on the transaction last June and the final outstanding condition, the posting of a C$25.5 million reclamation bond, has now been completed. Wolfden plans an exploration program at Lupin and also hopes to use the existing mill and other facilities to support its development projects.


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