June 17 (Reuters) - Former Xstrata boss Mick Davis' X2 Resources, long considered a front runner, is out of the race for a stake in Barrick Gold's Zaldivar copper mine in Chile after it was outbid in the first round of the sale process, according to three sources close to the matter.
Rival bids for a stake of up to 50 percent in the mine, once dubbed as the "Andean ATM", were superior to the proposal made by London-based X2 Resources, a private mining group led by Davis.
"There were seven bids higher than that of X2," said a London-based banking source with knowledge of the matter. "They couldn't make the numbers work."
X2 and Barrick declined to comment.
Reuters reported earlier on Wednesday that X2, and rival miner Glencore, were among companies that placed bids last week for two Anglo American copper mines in Chile, citing sources.
The deadline for second round bids for Zaldivar is early July, said two industry sources based in Canada.
Analysts have put a price tag of around $1 billion on a 50 percent stake in the mine, which Barrick put up for sale in April as it strives to cut $3 billion off its debt pile by year end.
Chilean copper miner Antofagasta Plc was one company interested in Zaldivar, but it was not clear whether it would be a second round bidder, said another mining industry source with knowledge of the situation.
Others in the running for Zaldivar likely include Canadian-based base metals miner Teck Resources, possibly backed by a Chinese partner; mid-sized Canadian copper miner HudBay Minerals, also with a partner; and an unnamed Chinese miner, several sources said.
Canadian private mining firm Magris Resources, run by former Barrick CEO Aaron Regent, was also expected to be in the second round, as is Anemka Resources, the mining arm of private equity fund Warburg Pincus.
Another potential round-two bidder is Minera Escondida, which operates Escondida, the world's largest copper mine, said three sources. The firm, whose mine lies adjacent to Zaldivar, is owned by BHP Billiton, Rio Tinto and a Japanese consortium. The sources stressed that a bid from Minera Escondida was contingent on the willingness of all the partners.
BHP, Magris, Antofagasta and Anemka were not reachable for comment. Teck, Rio and HudBay declined to comment.
Barrick is being advised on the sale by the boutique firm of mining rainmaker Michael Klein and TD Securities. (Additional reporting by Freya Berry in London, Sonali Paul in Melbourne and John Tilak in Toronto)