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Cliffs Reviews Options Regarding Proposed KWG Takeover
06/08/2010 - Cliffs Natural Resources Inc. continues to review its options with respect to making a formal offer for the common shares of KWG Resources Inc. Cliffs may not make such an offer due to KWG’s recent disclosure that it has entered into a binding letter agreement to merge with Spider Resources Inc.
Cliffs Natural Resources Inc. continues to review its options with respect to making a formal offer for the common shares of KWG Resources Inc.
The company notes that it may not make such an offer due to KWG’s disclosure on May 25—one day after Cliffs’ announced intention to bid for KWG—that it has entered into a binding letter agreement to merge with Spider Resources Inc.
Cliffs says it will provide further information when a final decision is made.
As Cliffs stated previously, it can achieve its strategic objective of gaining control of the “Big Daddy” chromite project located in the McFaulds Lake area of Northern Ontario by acquiring either Spider or KWG. Cliffs currently owns a 47% interest in the project while Spider and KWG each owns 26.5% and have the option to earn-in up to 30% each.
Cliffs says it remains firmly committed to its offer for Spider, which commenced on May 31, 2010, and expires on July 6, 2010, unless extended or withdrawn. Cliffs is offering a price of Cdn $0.13 in cash per common share, which represents a premium of 62.5% over the closing price on the TSX-V on May 21, 2010.
Cliffs Natural Resources, an international mining and natural resources company, is the largest producer of iron ore pellets in North America, a major supplier of direct-shipping lump and fines iron ore out of Australia and a significant producer of metallurgical coal.
The company is organized through three geographic business units in North America, Asia Pacific, and Latin America. The company’s North American business unit comprises six iron ore mines owned or managed in Michigan, Minnesota and Canada and two coking coal mining complexes located in West Virginia and Alabama. The Asia Pacific business unit comprises two iron ore mining complexes in Western Australia and a 45% economic interest in a coking and thermal coal mine in Queensland, Australia. The Latin American business unit includes a 30% interest in the Amapá Project, an iron ore project in the state of Amapá in Brazil.
Other projects under development include a biomass fuel production plant in Michigan and Ring of Fire chromite properties in Ontario, Canada. Over recent years, Cliffs has been executing a strategy designed to achieve scale in the mining industry and focused on serving the world's largest and fastest-growing steel markets.
