(Reuters) - Taseko Mines Ltd said on Monday it will buy mineral exploration and development company Curis Resources in an all-share deal, giving the Canadian miner access to the advanced-stage Florence copper project in central Arizona.
Taseko, whose New Prosperity copper and gold project in British Columbia was turned down earlier this year by the Canadian government, said the Florence project will help "strengthen" its near-term development pipeline.
"Florence adds diversity to our pipeline of development projects," said Taseko chief executive Russell Hallbauer in a statement, adding that the Vancouver-based company should be able to manage funding for the $210 million project through to production.
Under the deal, Curis shareholders will receive 0.438 of a Taseko common share for each Curis share held, worth $1.055 per share based on Taseko's 20-day volume weighted average price for the period ending Sept 5. That would value the smaller company at roughly C$80 million ($72.9 million).
Taseko has also agreed to provide Curis with $2 million in short-term financing to ensure the smaller company has sufficient liquidity to operate until the deal closes.
Both Curis and Taseko are associated with the privately owned, Vancouver-based Hunter Dickinson mining group. Taseko's Hallbauer is a Curis director, though the company said he declared a conflict and was not involved in the board decision.
Taseko owns and operates the Gibraltar copper-molybdenum mine in British Columbia, and is developing three other projects in the Pacific coast province, including the stalled New Prosperity project.
Taseko is in the process of suing the Canadian government for damages over that project, after Ottawa rejected it on the grounds it would damage the environment and nearby aboriginal communities. New Prosperity is Taseko's main avenue of growth.
Taseko's shares closed at C$2.32 on the Toronto Stock Exchange on Monday, while Curis's shares closed at 90 Canadian cents.
Reporting by Nicole Mordant and Julie Gordon in Vancouver; Editing by Ken Wills