miningnet.news-takeover

ConsMin sets its sights on Titan

Michael Quinn


Wednesday, April 07, 2004
CONSOLIDATED Minerals has moved into position to make a scrip and cash takeover bid valued at $94 million for emerging nickel miner Titan Resources.

ConsMin has built up a 2.2% stake in Titan over the last few weeks, and has pre-bid agreements for another 12.7% from major shareholders.

The chromite and manganese producer is now carrying out due diligence and will decide before April 23 whether to make a follow through with a formal offer.

The deal agreed to by shareholders accounting for 12.7% of Titan would see one ConsMin share plus 36c offered for every three Titan shares. This valued Titan shares at 52 cents as at close of trade last night.

ConsMin managing director Michael Kiernan said Titan was trading at 38c when the idea for the offer began to take shape.

Asked about the rationale for the Titan bid, Kiernan told MiningNews.net the acquisition was a cost-effective entry into the nickel sector and a natural focus given its already established ties to the steel industry.

Aside from its manganese and chromite businesses - which Kiernan said are throwing off free cash of $2-2.5 million per month - ConsMin also has a joint venture with Fortescue Metal Group that could see the development of an iron ore mine at Mindy Mindy in the next three to four years.

Titan announced earlier this month that mining had begun at its Armstrong deposit near Kambalda containing 465,000t grading 2.12% nickel, with Armstrong one of a number of suggested developments by Titan over the next few years.

However, despite the rosy outlook in terms of production and the nickel price, tensions are believed to have been simmering on the Titan board for some time.

Late last year managing director Bill Ryan "retired" - though he remains as interim MD with a replacement being sought - with long time company secretary (and alternate director) Flavio Garofalo and director Felix Pole also exiting in the last four to five months.

Pole is one of the shareholders that accepted the pre-bid offer, with none of the current board, including Ryan - who's understood to speak for around 7 million shares - amongst this group.

Titan has appointed Michael Blakiston and David Dix to assess the bid.

Titan also pointed out that it had had discussions with several other parties in recent times.

Shares in Titan were up 4c to 52c in early afternoon trade, whilst ConsMin had retreated 5c to $1.17.