Tiberon Minerals is set to be acquired by private-equity firm Dragon Capital Management, a major shareholder, in a 218mio US$ deal to help develop a tungsten/fluorspar mine of northern Vietnam.
The Nui Phao mine in the Vietnamese province of Thai Nguyen held one of the largest deposits in the world of both tungsten and fluorspar outside of China. Fluorspar is used in refrigerants and aluminum production. Tungsten is used in steel alloys and electric light filaments.
Dragon said Tuesday it will offer 3.17US$ a share for the 87.8% stake in Tiberon it doesn't already own, a bid that values all of Tiberon at about 248mio US$. That's a 53% premium over the closing share price of Tiberon.
Tiberon has been working to develop the mine, but has run into opposition from the Vietnamese government over the company's plan to expand its stake in Nui Phao.
In September, the Vietnamese Ministry of Planning and Investment said it wanted the original ownership ratio to continue, with Tiberon owning 70% and Vietnamese joint-venture partners holding 30%.
The Nui Phao project is the largest mining project now under development in Vietnam and is scheduled to begin production in early 2009. It contains over 55 million tonnes of proven and probable reserves, also making it one of the largest tungsten-fluorspar deposits outside China. That may bode well for its prospects as demand from that country, which has been producing and consuming steel at a record pace, continues to pick up speed.
For now, CMC Cometals, a division of U.S.-based Commercial Metals Co., has agreed to buy all of Nui Phao's projected acid-grade fluorspar output for the first three years of production.
Dragon, an investment banking institution with an exclusive focus on Vietnam, has agreed to pay a 10mio US$ break fee to Tiberon under certain circumstances if the deal doesn't go through.
Source: Thanh Nien
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