Independence agrees to Jabiru takeover

Independence Group NL, an Australian nickel producer, has agreed to buy the shares it doesn’t own in Jabiru Metals Ltd, valuing the copper and zinc company at A$532 million (US$539 million).

The stock offer values Jabiru at 96.1c/share, 45% more than its closing price, the two Perth-based companies said in a joint statement.

The deal will give Independence the Jaguar mine in Western Australia, which has an annual production of about 25,000t of zinc, 9,000t of copper and 680,000oz of silver, and the Stockman copper, zinc, silver and gold development in Victoria state.

“For Independence, diversifying away from nickel into other base metals will spread its risk,” said Tim Serjeant, a Perth-based analyst at Argonaut Securities Ltd. “It’s been keen on the exploration potential of Jabiru’s assets for a while. Independence has a fairly healthy premium in its share price and now’s a good time to do it.”

Independence closed up almost 2% at A$7.69/share at the 4:10 pm close of Sydney trading on the Australian stock exchange. Jabiru closed unchanged at 66.5c.

Independence owns the Long sulphide nickel project that produced 5,111t in the six months to Dec 31, according to a statement yesterday. It also owns 30% of the Tropicana gold project in Western Australia, with AngloGold Ashanti Ltd holding the balance.

Tropicana is expected to produce 3.45Moz over 10 years after it starts operations by the end of 2013, it said.

“Jabiru shareholders will have to be happy,” Mr Serjeant said. “It’s a pretty compelling premium and you get to participate in the growth story of Independence with its Tropicana gold assets.”

Independence will own 19.97% of Jabiru after agreeing today to buy a 10.48% stake from Metals X Ltd for 82.9c cash, today’s statement said. Metals X agreed to support the takeover and agreed to sell its remaining holding of 9.48% to Independence, it said.

“The acquisition of Jabiru represents a key step in achieving Independence’s goal of growing a great multi-commodity Australian mining company,” Independence managing director Christopher Bronwick said in the statement.

Feb 9 (Bloomberg)