Flanking move by Conquest

Finance

Publishing Date: 16 Sep 2010 2:53pm GMT
Author: Mining Journal

The share price of Conquest Mining Ltd has surged on twin announcements this week that it was acquiring a 40% stake in the Pajingo mine (controlled by North Queensland Metals Ltd), and had secured an offtake agreement for its 100%-owned Mt Carlton project that could be worth as much as A$1 billion.

In announcing a deal to acquire 40% of Pajingo from Heemskirk Consolidated Ltd (for A$27 million in cash and shares worth A$10 million), Conquest has outflanked NQM's opposition to its takeover offer for the entire company. Heemskirk dropped its own bid for NQM early this month when it looked like the company was going to be the subject of a bidding war.

With Conquest already owning 23.5% of NQM, and now a healthy stake in its major asset, the market clearly believes takeover negotiations are likely to resume. Heemskirk will emerge with around 6.7% of Conquest.

To fund the cash component of its A$58 million offer for NQM, Conquest has announced a A$10 million underwritten capital raising through Southern Cross Equities.

Conquest also announced a long-term concentrate offtake deal with Chinese gold smelter Shanduong Guoda Ltd for the V2 deposit at its Mt Carlton project in north Queensland. The life-of-mine contract is for 490,000t.