By Wan Zhihong (China Daily)
Updated: 2007-12-11 09:08

Two Chinese companies have inked a 3.3-billion-yuan ($445.95 million) deal to take over Northern Peru Copper Corp (NPC), a Vancouver-based miner with projects in Peru.

China Minmetals Nonferrous Metals Co and Jiangxi Copper Co are offering C$455 million ($452 million) for NPC, Jiangxi Copper said in a statement to the Shanghai Stock Exchange yesterday.

The two companies are offering C$13.75 per share in cash, a premium of more than a third to NPC's 20-day average price as of last week.

Shareholders representing 42 percent of NPC's stock have signed lock-up agreements in support of the deal. If it fails, NPC will pay a fee of about 3.5 percent of the transaction value, said the statement.

NPC has been looking for a buyer this year to acquire and develop its Galeno copper-gold-molybdenum project in Peru. It said the Chinese companies had the best bid.

"Minmetals and Jiangxi Copper presented us with the best offer to acquire the company and we are happy to accept their offer," Northern Peru Copper Chairman Ross Beaty was quoted as saying by Canadian media.

"Both are large companies with extensive experience in the copper sector, and are fully capable of developing Galeno into one of the world's premier copper mining operations."

The Galeno project will have an average production capacity of 144,000 tons of copper concentrate per year over a 20-year mine life, including 200,000 tons annually in the first five years.

A preliminary feasibility study found it will generate 3,600 construction jobs and 657 permanent jobs.

In addition to Galeno, NPC owns the adjacent Hilorico gold deposit and the Pashpap copper-molybdenum site.

The deal will boost Jiangxi Copper, China's biggest integrated producer of the metal, said Shi Weiping, an analyst with Orient Securities in Shanghai.

He said the deal would increase Jiangxi Copper's mining assets by one-third.

The deal is the third this year involving Chinese miners buying assets in Peru. Aluminum Corp of China in June agreed to pay $790 million for Peru Copper.

In April, China's second biggest gold miner Zijin Mining Group agreed to buy over 50 percent of Peru-focused copper miner Monterrico Metals.