Chinese mining giant moves into Nunavik

A Chinese mining giant is moving into Nunavik.

Jien Nickel said Nov. 12 that its bid to buy Canadian Royalties Inc. had been approved by two thirds of the mining company’s shareholders and debenture holders.

That’s despite opposition from a group representing the debenture holders, who said they would fight the new offer because it would give them only $800 for every $1,000 they had loaned.

Jien Nickel said it would ask for the remaining Canadian Royalties stock or debenture holders’ support over the next 10 days.

Jien Nickel announced this past August that its joint-venture mining company with Goldbrook Ventures wanted to buy Canadian Royalties— a move that took Canadian Royalties by surprise.

Jien Nickel said it would pay $148.5 million for a a 75 per cent stake of the new company.

The bid came after Canadian Royalties’ $500-million development of the Nunavik Nickel mine fell apart last year, a casualty of the company’s legal disputes with its former partner, the decline in metal prices, logistical problems and bad economic times.

Recently, Jien Nickel increased its offer to $192 million.

Canadian Royalties owns 25.34 million tones of ore in its six ore deposits in Nunavik.

“We choose to purchase small and midsize overseas mines because it is easier to gain their governments’ approvals,” Jien Nickel said in a Nov. 12 news release.

In the wake of the global recession, Chinese interests have taken advantage of low metal prices by going bargain hunting for financially-troubled Western mining assets.

Beijing-based China Minmetals Corp. took over Oz Minerals, the struggling Australian zinc producer that owns the lucrative Izok Lake and High Lake mineral properties in the Kitikmeot region of Nunavut, earlier this year.

The deal gave Minmetals ownership of the huge lead-zinc deposit at Izok Lake, as well as the High Lake, Gondor and Hood base metal deposits and the old Lupin Mine site.