Canada's Wolfden Agrees to Zinifex $306 Million Offer

Australia-listed zinc miner Zinifex said on Tuesday Canada's Wolfden Resources has backed a scaled-down C$360 million (US$306 million) takeover bid.

Zinifex, the world's second-biggest zinc producer, said the board of Wolfden, which holds several advanced-stage Arctic properties, had determined that Zinifex's offer was fair and in the best interests of shareholders.

A successful takeover would help Zinifex, which mines most of its zinc from lodes in Australia with finite operational lives, to replace production and grow internationally.

Wolfden's properties include its wholly-owned High Lake and Izok Deposits, two of the highest-grade undeveloped copper, zinc, gold and silver deposits in North America.

"Due diligence has confirmed our views that Wolfden would represent an excellent fit with Zinifex's strategy to grow its mining business," Zinifex Chief Executive Greig Gailey said in a statement.

Zinifex made a non-binding C$3.90 per share cash offer for Wolfden in February, but lowered the bid price to C$3.81 per share earlier this month. The offer price is at a 2.4 percent premium to Wolfden's last traded price.

Zinifex said the offer included shares that may be issued on the exercise of Wolfden warrants and stock options.

The bid was conditional on Zinifex winning two-thirds of Wolfden's shares and certain senior Wolfden executives remaining with the company.

Wolfden has grown through acquisitions and exploration, while Zinifex was assembled from the remnants of the Pasminco Group, which collapsed in 2001 owing billions of dollars due to depressed metals prices and bad hedge bets.

Zinifex plans to spin its metal-making businesses off into a joint venture with Belgium's Umicore to focus on mining.