Vancouver miner said to be in Davis sights surges
Capstone Mining (TSE:CS) shares raced ahead on Friday after a report by Bloomberg named the Vancouver-based copper miner as as possible acquisition target for Mick Davis' X2 Resources $5.6 billion private equity fund.
In afternoon trade Capstone was trading 7% higher at $1.36 per share, not quite enough to lift the company's market value to above US$500 million said to be X2's the lower threshold for deals.
Gains for other targets mentioned Winnepeg's Hudbay Minerals (TSE:HBM) and Imperial Metals (TSE:III) which is also located in Vancouver were modest.
“A deal in Canada could be a prelude to the bigger acquisition he’s been seeking for some time,” two people familiar with Davis’ plans told Bloomberg on Friday.
Capstone is a mid-tier player with its main asset the Pinto Valley mine in Arizona purchased from BHP Billiton for $650 million in 2013.
Capstone expects to produce 90,000 tonnes of copper from Pinto Valley and its two other properties in Mexico and Canada's Yukon this year and small quantities of zinc, lead and precious metals.
Ten days ago Bloomberg speculated that diversified giant Teck Resources (NYSE:TCK) were in talks to merge with Chile's Antofagasta which shot the Vancouver miners' shares up 15%.
After Teck denied it was in merger talks all the gains evaporated. Stock exchange officials are looking into matter.