consolidated minerals moves on titan, page-3

ConsMin bids for Titan

Ben Sharples
Tuesday, March 28, 2006

CONSOLIDATED Minerals' hunger to build its nickel business may see it swallow Titan Resources after the diversified miner launched a $A29 million off-market takeover bid for the junior.



Consolidated Minerals managing director Michael Kiernan

"Titan has always been on our radar, we looked at it two years ago and on the public information and we indicated we might make an offer," outgoing ConsMin managing director Michael Kiernan told MiningNews.net.

"Titan on their own will always struggle, they've got a couple of million dollars in the bank, so they're going to have to raise some capital, and they can't fast-track their exploration, whereas we can.

"We can escalate the exploration to bring a couple of mines online sooner … and from our point of view, Titan clipped on the side of ConsMin enhances our nickel operation. We estimate that we could have one of those mines, if not two, operating in a 12-18 month period."

Under the offer, ConsMin is offering one of its shares for every 35 Titan shares, valuing the Titan stock at a 34% premium to yesterday's closing price of 5.8c.

ConsMin is already Titan's largest shareholder, holding a 19.9% stake, with the two companies engaged in 50:50 joint ventures at the Munda and Armstrong nickel projects in the Widgiemooltha Dome region.

"Mark Creasy and David Reed are the major shareholders apart from us, and I think they will see logic, although I haven't spoken to them, in being part of a larger group that can fast-track exploration to bring on some mines earlier than what Titan would be able to do," Kiernan said.

If ConsMin is successful, the diversified miner will snare a 227 square kilometre tenement position at Widgiemooltha containing resources of 123,000 tonnes of contained nickel in eight separate deposits.

ConsMin's nickel portfolio is made up of the 5000 tonne per year Beta Hunt mine at Kambalda, and the nearby $40 million East Alpha project, which is expected to come online around mid-year, boosting nickel production to around 9000-10,000tpa.

The diversified miner's oft-stated objective is to increase nickel production to 20,000-25,000tpa, and ConsMin said the Titan acquisition would enable the company to secure control of a substantial resource base with the potential to underpin construction of its own nickel concentrator.

"We have made a decision we will have our own concentrator, the only decision is … do we construct it from grassroots or do we acquire an existing plant and convert it to a nickel operation," Kiernan said.

"There are one or two gold plants in the Kalgoorlie region that are on care and maintenance and certainly we are keen to acquire one of those and convert it."

In a market statement, Titan said its board would consider the terms of the offer and advised its shareholders to take no action.

MiningNews.net was unable to reach Titan managing director Jeffrey Gresham for comment.

Shares in Titan, which has a market capitalisation of $A21.78 million, gained 1.6c (27.6%)during morning trade to 7.4c, while shares in ConsMin gained 1c to $2.73 – capitalising it at $591.63 million.