Last week AUR RESOURCES and INMET MINING, both of Toronto, announced that they had called off their proposed merger. The combined company would have been one of North America's premier copper producers with a market capitalization of approximately US$1 billion. But it is not to be.
Both companies want to make clear the fact that no technical or financial reasons lie behind the latest decision. After due diligence, all was found to be in order. Beyond that, they are not going into much detail.
If there were no business hindrances to the merger, that leaves the public to speculate that the reasons must rest with the corporate cultures of the two companies.
Jim Gill, president and CEO of Aur, said, "It's better to run away from the altar, than to try to get out of a marriage later. I think that we have a difference of views on how the combined company would go forward."
He said that the attraction of the deal was that larger combined cash positions and cash flow would allow the company to compete at the highest level. In his opinion it is better to be the biggest of the mid-tier producers rather than two small fish swimming in the same pond as giants Noranda and Teck Cominco.
"We look at this deal as an acquisition," Gill said, "and not all acquisitions get completed. We're back where we were before. We are strong individually, but not as strong as we could have been together."