Reuters quoted Capstone Mining as saying that it's on the acquisition trail willing to spend up to CAD 1 billion for a rival as it seeks to double its copper production.

Mr Brad Mercer VP for exploration said that the company is on the lookout for a merger of equals and would consider a bid for a rival with assets that are at an earlier stage of development than its own. I think first and foremost we are looking for a company that would double our production, so take us from 100 million pounds a year to something in the range of 200 million pounds a year and a merger of equals. We are looking a little further down the food chain than we were a few years ago, because there are not a lot of quality assets out there at the right price these days in this boom.

He said that prices for copper, Capstone's main product are rising on strong demand from China and other Asian economies and miners are racing to boost production. Copper CMCU3 for three month delivery on the London Metal Exchange has risen by two thirds since June, hitting an all time high of USD 10,190 per tonne in mid February. The metal used in power lines, construction and industrial applications was trading at USD 9,614.

He added that we are very aggressively looking at M&A opportunities. The company would prefer tie up with a company that has assets in the Americas, Australia or in certain parts of Asia. I think we could easily acquire something under a billion dollars and build it. The company has some CAD 200 million in cash and is willing to take on debt.

(Sourced from Reuters)