nothing new in this article but thought I would share with you...

nothing new in this article but thought I would share with you anyway.
March 08, 2011


BC Iron?s Shares Strengthen, As Regent Pacific Mulls The Details Of Its Potential Offer
By Alastair Ford


Will Regent Pacific?s plans to take over BC Iron go through? Much depends on the decisions taken by Ukrainian mining magnate Gennady Bogolyubov, and he, as a relative newcomer on the scene, has apparently yet to make up his mind.

Having said that, BC Iron itself is fairly new. It was created in 2006 by an agreement between manganese specialist Consolidated Minerals and Alkane Exploration to combine iron ore prospects in the Pilbara region of Western Australia. It was first listed on the Australian Stock Exchange (ASX) in December 2006, with Consmins as the largest shareholder. However, Gennady Bogolyubov took control of Consmins after winning a protracted bidding contest in 2008. And through Consmins he inherited more than 21 per cent of BC Iron.

During that time, though, BC Iron had made plenty of progress. By June 2009 it was able to announce the completion of a feasibility study for its iron ore deposit. The study identified a reserve of about 36 million tonnes of ore with a grade of 57% iron. A month later, in August of 2009, BC Iron's board signed a joint venture with the larger iron ore miner, Fortescue Metals Group. This provided BC Iron with access to Fortescue's costly railroad and port loading terminal, as well as to its China marketing network, and allowed BC Iron to concentrate on getting a mine up and running.

A few weeks later, BC Iron did a deal with a Hong Kong metals trader supplying Chinese steel-mills. BC Iron agreed to supply 20 million tonnes of iron ore over eight years, assuming a successful ramp up from the proposed initial 1.5 million tonnes per year to the ultimate five million tonnes. At the time that deal was signed, production and shipping were due to start in late 2010, although the first shipment actually went out early this year, following a resource upgrade.

BC Iron's share price rose strongly throughout 2010, such that the company was able to raise A$18 million in November A A$2.30. Appetite was surely whetted by the strong iron ore price, and by the news that the company?s first truck loads of iron ore were being readied, the first railroad shipments to port had been scheduled, and that 60,000 tonnes of iron ore bound for China was likely to be despatched to Port Hedland in January.

Since then, there?s been further strength, and the shares are currently trading at A$3.05. Even allowing for that good news, the A$3.30 offered by Regent Pacific looked like a reasonable premium when it first came in back in January, atl east to the board of BC Iron. The official response stated that "the offer delivers an all-time high price for BC Iron shares with the certainty of cash at a time when iron ore prices are reaching historical highs". The bid values BC Iron at A$276.3 million, although Regent has since asked for more time to get its ducks in a row.

Regent Pacific is registered in Cayman Islands, and was first listed in Hong Kong in 1997. It is controlled by two co-chairmen, company founder James Mellon, who holds almost 12 per cent of the shares, and Stephen Dattels, a Canadian, who holds 7.3 per cent. Currently, these two occupy non-executive board seats. The chief executive is Jamie Gibson, who is British. The company has prospected for coal, copper, zinc, and other metals in China and Mongolia, and has run a small copper-zinc mine in Yunnan province, China.

So, still a lot to play for, as a recent statement from BC Iron's Tony Kiernan intimated: ?The BC Iron Board confirms that it has been in recent discussions with its major shareholder Consolidated Minerals Limited regarding the Regent Pacific offer. However, while we can say that these discussions have been positive and constructive, we are unable to confirm the intention of Consolidated Minerals in relation to Regent Pacific Group?s takeover offer for BC Iron?.




James Mellon, chairman of Regent Pacific, is also chairman of Rivington Street Holdings, the ultimate owner of Minesite