Nevsun Reservoir deal shows M&A appetite for quality mines: execs
By Nicole Mordant
VANCOUVER (Reuters) - A tussle for control of a promising copper project in Serbia shows there is appetite for high quality mining assets in stable countries and may be a harbinger of further industry mergers and acquisitions, executives involved in the deal said on Monday.
Nevsun Resources Ltd (NSU.TO: Quote) said on Sunday it had agreed to buy fellow Canadian mining company Reservoir Minerals RMC.V for $365 million, getting its hands on the large, high-grade Timok copper-gold project in eastern Serbia.
Another Canadian miner, Lundin Mining (LUN.TO: Quote), had also been gunning for a stake in Timok after agreeing last month to buy part of U.S. mining giant Freeport McMoRan Inc's (FCX.N: Quote) stake.
Timok is jointly owned by Reservoir and Freeport, which is under pressure to sell assets to reduce its $20 billion debt pile. The Reservoir-Nevsun deal trumps the Lundin one as Reservoir has the right to make the first offer if Freeport wants to sell.
Nevsun was one of many companies interested in acquiring Reservoir and Timok, Reservoir Chief Executive Officer Simon Ingram said.
"There were lots of groups in the data room," he said in an interview.
A drop in copper prices to seven-year lows below $2 a pound in January has created opportunities for miners with strong cash balances to acquire assets, added Nevsun Chief Executive Cliff Davis.
The commodity price drop has forced many debt-laden miners to look at selling off choice assets. Continued...