China Railway, Tongling Make $651M Bid for Corriente Resources

Vancouver, British Columbia 12/30/2009 03:50 AM GMT (TransWorldNews)

China Railway Construction Corp. and Tongling Nonferrous Metals Group Holdings Co. have offered C$679 million ($651 million) for Canada’s Corriente Resources Inc., according to Bloomberg

 

The move is expected to help the two companies gain copper resources in South America, a region they have already entered in order to maintain supply for the world’s largest economy.

 

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Corriente shareholders will receive C$8.60 per share in cash, which is 14 percent more than the last traded price of the company.

 

China Railway Construction, China’s biggest railroad builder, and Tongling, the nation’s second-largest copper producer, would gain mining rights to 17 deposits in the Ecuador’s four main mining regions of Mirador, Mirador Norte, Panantza and San Carlos.

 

Corriente said in May that the company planned to spend $418 million on start-up of its Mirador mine and was in talks with a partner that might invest as much as $3 billion. Corriente’s reserves in Ecuador hold about $50 billion worth of copper based on prices of about $2 a pound.

 

Corriente shares closed at C$7.55 on the Toronto stock exchange on Dec. 24 and have risen 102 percent in the past year. Canadian markets were closed for a holiday yesterday.

 

China Railway dropped 0.3 percent to HK$9.87 in Hong Kong trading before the announcement. The stock has fallen 14 percent in the past year. Tongling stock, which has more than tripled in the past 12 months, rose 2.7 percent on the Shenzhen stock exchange.

 

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