China Mining Resources Group Limited aka “China Mining” recently announced their indirect acquisition of Fortune Minerals Limited (FT.TO). The purchase was conducted by Best Tone Holdings Limited “Best Tone”, which is wholly owned by China Mining. This procurement is a combination purchase of common shares and warrants. Now China Mining holds 15.31% ownership of Fortune Minerals Limited common shares and if the warrants are exercised 19.19% of the issued and outstanding common shares will be under their control. Under Canadian law this means China Mining is now a beneficial and controlling shareholder.
Fortune Minerals Limited is a natural resources company with the bulk of its assets in NICO cobalt-gold-bismuth deposits and anthracite coal deposits. Fortune has several mining deposits and exploration projects in Canada near Yellowknife in the Northwest Territories and Mount Klappan in northwest British Columbia. Further, they also own the Sue-Dianne copper-silver deposit, 25 kilometres north of the NICO deposit.
There have been a number of major events revolving around the company in recent weeks. It was just announced that Fortune will benefit from a major tax advantage announced by the Saskatchewan government. The provincial government just announced several new tax incentives to attract new business. This includes the introduction of a five year Corporate Income Tax incentive for companies that process minerals imported into the province. What does Saskatchewan have to do with Fortune Minerals?
The company just announced they will locate their metallurgical processing plant for their NICO deposits in Saskatchewan. This should be a great benefit to the bottom line. It’s a good thing the industrial rail system in Canada can make these projects viable. It would be a shame to see the raw extracts heading overseas to be processed and resold to Canada like our raw logs are.
China may not have announced that they have diversified away from the U.S. Dollar, but you can bet announcements like these make you wonder. Russia may have announced their move towards the Canadian Dollar, but China just buys assets and lets the market extrapolate. This is just one more reason to invest in Canada today—chase the gravy train and you might catch it.
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In addition to the new policy of the Saskatchewan Government I think
there maybe another significant aspect to recent news releases of
Fortune that might merit a mention.
Read the two releases dated December 3rd that can be found by looking
at the “news” related to Fortune Minerals on the TSX website
In the news release of 9:42 AM FT announces a $17,25 million Public Offering.
In the news release of 10:15 AM the China Mining Resources Group announces
the acquisition of 9.1 MIllion units of FT.
To me, it would appear some kind of a sweetheart deal was entered into
here that denied over one third of the FT’s public offering ever
reaching the retail clients of the underwriters.
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After seeing US companies buying ours, it’s now time to Chinese to do the same thing