Stockwatch Coverage SKE Their news was related, and it had a huge impact on Joseph Mullen's Questex Gold & Copper Ltd. (QEX). Questex jumped 37 cents to $1.13 on 6.81 million shares on word that Skeena is offering 65 cents in cash and 0.0367 share for each of its shares, a premium of 58 per cent to Tuesday's close. The deal is more a dismemberment than an acquisition, since in a side deal, Newmont will acquire the Heart Peaks, Castle-Moat and North ROK-Coyote properties from Questex's portfolio.
So why is Skeena involved? Well, when Mr. Coles, president and chief executive officer, enthuses his excitement at adding over 74,000 hectares of ground to Skeena's holdings, he is looking at Questex's KSP and Kingpin projects, which are "proximal" -- promotably near -- Skeena's Eskay Creek and Snip projects in the golden Triangle of British Columbia.
Involving Newmont in Skeena's acquisition, Mr. Coles says, allows Skeena to "acquire these strategically important land packages while minimizing share dilution." How so? Well, Newmont is paying $27-million to Skeena for its pieces of Questex, a sum that not coincidentally covers the cash cost of Skeena's offer. Therefore, Skeena is adding the KSP and Kingpin properties for about 1.5 million shares, giving Questex's shareholders less than 2 per cent of Skeena's expanded share count.
Mr. Palmer, Newmont's president and CEO, says that his company is "acquiring the land in an effort to address concerns raised by the Tahltan Nation and the Iskut community." In other words, the claims around Iskut are not being acquired for their mineral potential. Instead, portions of the acquired ground will be made available to the locals to "support the land use planning objectives" of the Tahltan Nation and Iskut.
Essentially, Newmont wants to develop its Saddle North deposit, which it acquired last year through its acquisition of GT Gold Corp. Newmont paid $3.25 per share in cash, over $450-million in all, to acquire GT Gold's Tatogga project, which also hosts the Saddle South deposit, just west of Saddle North -- both of which are just southwest of Iskut. Questex's Castle property is immediately west of the Saddle twins; more strategically perhaps, the North ROK property is mere metres east of Iskut.
So, it appears, Newmont is paying $27-million in cash in the hope of keeping the locals happy for the greater good of its Tatogga project, where it looks to develop its Saddle twins under the watchful glare of the Tahltan, while Skeena is paying about $21.5-million in stock to acquire additional ground near Eskay. Meanwhile, Questex's shareholders are smiling on their way to the bank.