MONTREAL — Canadian Royalties has agreed to a sweetened offer from Jien Canada and Goldbrook Ventures that will see Jien scoop up all the shares of Canadian. The amended offer increases the price per share of Canadian Royalties to $0.80 and of Canadian’s 7% convertible senior unsecured debentures to $800 per $1,000.
Canadian Royalties’ major asset is the Nunavik nickel project near Xstrata’s Raglan mine in Quebec’s far north. According to the 2007 feasibility study, the Nunavik property contains probable reserves of 11.3 million tonnes averaging 0.97% Ni, 1.13% Cu, 0.05% Co plus platinum, palladium and gold values in several deposits. An estimate of the total measured and indicated resources made in mid-October 2009 was 21.9 million tonnes grading 0.93% Ni, 1.15% Cu, 0.04% Co, plus precious metals.
Jaguar Financial Corp., which has a major investment in Canadian Royalties, has taken exception to the deal. Jaguar believe that the debenture holders should receive $1,010 per $1,000 of face value. It says Jien’s latest offer inflates the share price at the expense of creditors. Furthermore, Jaguar believes that if Canadian Royalties were pushed into creditor protection, debenture holders would receive 100% of their investment and shareholders nothing. Jaguar has announced that it is considering various alternatives to block the Jien offer.
For more on the Nunavik nickel project, go to www.CanadianRoyalties.com.