Former Barrick Gold Corp. (TSX, NYSE: ABX) chief executive Aaron Regent is making a striking comeback to mining after his private equity firm Magris Resources teamed up with Asian investors to buy Iamgold Corp.’s (TSX: IMG) (NYSE:IAG) niobium mine in Quebec for US$530 million in cash.
The long-planned sale of Niobec, located in the Saguenay-Lac-Saint-Jean region in Quebec, includes an adjacent rare earths deposit, Canadian Iamgold said in a statement.
The company, which has assets in Canada, South America and Africa, added it will get an additional $30 million when commercial production begins at the nearby deposit.
This is the first asset Regent’s firm acquires and comes after his failed attempts to buy the Glencore’s Las Bambas copper project in Peru and an older copper mine from Freeport-McMoran Inc.
Niobec mine, acquired by the Toronto-based gold miner in 2006, is one of the world’s three producers of niobium, a rare metal with superconductive properties. Niobium is used to make alloys for jet engines and to strengthen steel.
The acquiring Asian group includes Singapore’s Temasek Holdings and CEF Holdings Ltd, a Hong Kong-based investment company owned by Canadian Imperial Bank of Commerce and billionaire Li Ka-shing’s Cheung Kong Holdings Ltd.
Iamgold, like the rest of the gold mining industry, is in its second year of severe cost cutting to deal with the plummeting gold prices.
The precious metal dropped Friday below $1,200 an ounce, down a third from $1,900 in 2011.
The deal is expected to close in the fourth quarter.