It may lack the huge price tag and international aspects of earlier bidding wars, but the fight for control of BCME...
It may lack the huge price tag and international aspects of earlier bidding wars, but the fight for control of BCMETALS is no less intense. Vancouver's IMPERIAL METALS CORP. and TASEKO MINES are locked in a battle to see who can get bcMetals shareholders to accept their offer.

At stake is bcMetals' Red Chris copper-gold project 18 km south of the village of Iskut, B.C. The project is the largest new copper-gold open pit development in North America. Two years ago, proven & probable reserves stood at 276 million t grading 0.349% Cu and 0.266 g/t Au. There were also measured & indicated resources of 446 million t at 0.36% Cu and 0.29 g/t Au. The company expects to significantly expand its resource estimate early this year. As designed in the feasibility study, it will be a 30,000-t/day mine and flotation concentrator. Over the course of the planned 25-year mine life, the project will produce 1.85 billion lb of copper and 1.187 million oz of gold in concentrates beginning in late 2007.

Most everything is in place for the start of construction. bcMetals already has copper offtake agreements in place. Red Chris has its environmental assessment certificate. The EPCM contract has been awarded to AMEC AMERICAS and MERIT CONSULTANTS INTERNATIONAL. Late in December, bcMetals was awaiting a commitment from the Government of British Columbia to extend the power grid to Iskut before the company can begin to draw down the US$110-million loan it has arranged.

Red Chris is very close to becoming a mine. For either bidder, adding a new producer to their portfolios of copper-gold mines in British Columbia would be a welcome opportunity to grow. Imperial Metals has the Mount Polley (100%) and Huckleberry (50%) copper-gold mines, near Houston and Williams Lake, respectively. Taseko owns and operates the Gibraltar copper mine near Williams Lake.

The bidding for bcMetals began in September 2006 with an unsolicited offer from Imperial. That was followed by a higher offer from Taseko. bcMetals adopted a poison pill to fend off unwanted suitors, and it struck up an equity partnership with a Chinese company, JIANGXI COPPER CO., which has agreed to contribute US$105 million toward the development of Red Chris.

Since the beginning of this year, both suitors have upped their offers. On Jan. 8, Imperial bumped up its offer, putting Cdn$1.125/share of bcMetals on the table and lowered the minimum tendering condition to 50% plus one common share. The next day, Taseko raised its offer to Cdn$1.15/share and dropped its earlier conditions regarding a litigation opinion and the proposed joint venture with Jiangxi. Considering the lack of conditions and total amount offered, Taseko's bid is valued at $44.1 million, topping Imperial's $43.2 million offer.

So there you have itanother protracted bidding war much like the fight for control of Falconbridge and Inco last year, but on a smaller scale. Imperial and Taseko have been buying up chunks of bcMetals, with Imperial now holding approximately 17.2% and Taseko almost 5.0%. They have hired lawyers and financial advisors to help them press their suits. If the one-upsmanship continues, the battle could go on many more months.

When one bidder emerges victorious, I would like to see an accounting of how much Imperial and Taseko spent on lawyers, financial advice, public relations, filings, mailings and special meetings regarding their takeover attempts. I suspect the total will run well into the millions of dollars. How much better it would be to have put that additional money into something tangible, like the development of the Red Chris mine and mill.


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