In a statement quietly released yesterday evening, Taseko announced plans to acquire Curis Resources (TSX:CUV) in an all-share deal.
Curis' major asset is the Florence copper project, located near the town of Florence, Arizona. It contains approximately 2.4 billion pounds of copper reserves with an average grade of 0.36-percent total copper. That's contained within a measured and indicated resource of 2.8 billion pounds of copper with an average grade of 0.33-percent total copper.
In exchange, Curis shareholders will get 0.438 of a Taseko common share worth about $1.055. The Globe and Mail reports that the deal values Curis at about C$80 million, or US$69 million.
Taseko first took notice of Curis about a year ago, purchasing roughly 11.6 million shares for a total of about 17 percent of the company's shares.
The key to Taseko's purchase of the company is the potential for construction at Florence in the coming months. Russell Hallbauer, president and CEO of Taseko, pointed out that with the Aley niobium project entering the environmental assessment stage, there is an opportunity to have two projects ready for construction in the next two years.
"In an era with few economically viable projects available, we are in an enviable position," he said in a statement.
Given that only one of Taseko's mines is currently producing metal, upping its potential output will give the company a healthier outlook moving forward.
The announcement caused a brief share price spike, with the company reaching $2.32 a share before falling to $2.14 and ending today at $2.20.
An interesting side point of the Curis deal is that Florence is the first property Taseko will fully own outside of BC. Its Aley, Harmony, Gibraltar (as well as the previously mentioned New Prosperity) projects are all based in Central and Northern BC.
As the future of mining in BC remains murky following the recent Imperial Metals (TSX:III) disaster, a fresh chance in a new country could be what Taseko needs.
Hallbauer admitted that the different location adds to the appeal of the purchase. "Florence adds diversity to our pipeline of development projects," he said in a statement. If the Curis project is able to proceed in the near future, it could thus bring some stability to the company.
That would certainly be a boon for Taseko, which has had an up-and-down year. Its long-awaited New Prosperity mine project — estimated to be worth about $1.5 billion — was finally rejected by the federal government in February after concerns were raised by groups about the impact the project would have on a lake considered sacred by local First Nations.
Then in July, analysts at the Bank of America (NYSE:BAC) downgraded its shares from a "buy" to an "underperform" rating. Taseko's share price reached a yearly high that month of $2.77 before petering out.
Since then, the company has announced plans to sue the federal government for damages related to the fallout over New Prosperity.
The transaction with Curis is expected to close in October.
Securities Disclosure: I, Nick Wells, hold no direct investment interest in any company mentioned in this article.Taseko Spreads its Wings with Planned Curis Resources Buy from Copper Investing News