UPDATE 3-Gold miner Iamgold to sell Quebec niobium mine for $500 mln
(Adds comments by CEOs of Magris and Iamgold; updates share price)
By Euan Rocha and Susan Taylor
TORONTO Oct 3 (Reuters) - Iamgold Corp said on Friday it will sell its niobium mine in Quebec to a group of companies led by private-equity investment firm Magris Resources for $500 million in cash so that it can focus on its core gold mining business.
Toronto-based Magris Resources, led by former Barrick Gold Corp chief executive Aaron Regent, is one of a handful of private-equity-backed firms that have been scouting for deals in the mining sector recently. The acquisition signals there is still active interest in finding bargains in the industry, which has been battered by a slide in metal prices.
The Niobec mine is one of the world's few producers of niobium, a metal with superconductive properties. It is used to make alloys for jet engines, and also used in medical devices, mobile phones and to strengthen steel.
"We like the fundamentals in the niobium market," Regent told Reuters. "It's a consolidated market with stable pricing and good growth due to the demand for high strength steel."
"We see it as an asset that will generate a lot of free cash flow and it's a good base asset to build a portfolio around," he said. "We're still in the market looking at other assets and our partners on this deal are aligned in that objective."
Magris is acquiring the mine in partnership with Singapore's Temasek Holdings and CEF Holdings, a Hong Kong-based investment company owned by Canadian Imperial Bank of Commerce and billionaire Li Ka-shing's Cheung Kong Holdings Ltd .
The long-planned sale of the Niobec mine, located about 200 kilometres (125 miles) north of Quebec City, includes a nearby rare earth metals deposit. Iamgold, which acquired the mine in 2006 through its purchase of Cambior Inc, will get a further $30 million from the Magris group when commercial production begins at the rare earth site. Continued...