https://www.nunatsiaqonline.ca/stories/article/65674nunavik_nickel_mine_hits_another_stumbling_block/
Nunavik Nickel mine hits another stumbling block
Goldbrook rejects Chinese partner's buy-out offer
NUNATSIAQ NEWS
The strained relationship between Goldbrook Ventures and Jilin Jien Nickel Industry Co., Ltd., majority owner of the Canadian Royalties’ Nunavik Nickel mine project in Nunavik, took another turn Nov. 30 when Goldbrook advised its shareholders not to accept a buy-out from the Chinese company.
Goldbrook refused the offer of .30 per share from Jilin Jien to Goldbrook shareholders to acquire all of the issued and outstanding shares of Goldbrook, which holds 25 per cent of the mine project. Estimates put the value of the rejected buy-out at about $67 million.
A special committee set up by Goldbook to examine the offer found it was“opportunistic, coercive” and lacked “key material terms,” including assurance that the deal would actually go ahead as presented.
In reaching this conclusion, a special committee considered a number of factors including:
•the potential offer price in light of Goldbrook’s depressed share price“which it believes arises from the lack of information provided by Jilin Jien with respect to the ongoing construction, financing, capital and operating expenditures and projected output for the Nunavik Nickel Project;” and,
• the need for complete financial information in light of Jilin Jien’s “unique position” as 75 per cent partner in the Nunavik Nickel project.
Jilin Jien Nickel Industry acquired the nickel mining company Canadian Royalties Inc. in 2010.
Goldbrook said its Chinese partners in the Nunavik Nickel mine project then violated their earlier partnership deal to develop Nunavik’s second nickel mine. Then, Goldbrook had objected to last year’s issuance of voting common shares by Jilin Jien which effectively reduced Goldbrook’s percentage of voting shares and interest in the Nunavik Nickel project from 25 per cent to 4.21 per cent — and in September, arbitrators ordered Jilin Jien to take steps to cancel the units which diluted Goldbrook’s share in Jien Canada Mining Ltd., which owns the project,restore Goldbrook’s shares to 25 per cent and “to use their best efforts to agree on and implement those steps.”
In August, during Premier Jean Charest’s visit to China, Jilin Jien Nickel Industry said it was ready to invest an additional $400 million in the Nunavik Nickel project.
Wu Shu, the mining company’s chief executive officer,made the announcement Aug. 29 in Beijing after a meeting with Premier Jean Charest, who was on a trade mission that has taken him to Japan and China.
According to Jilin Jien, commencement of commercial production of the mine, which will employ about 500 workers, is now scheduled for March2013.
On Nov. 28 La Presse reported that construction of the mine infrastructure had suffered a setback due to melting permafrost at the site of its proposed dock in Deception Bay.