TORONTO (miningweekly.com) – China's Jinchuan Group has made a C$150-million cash offer for Toronto-based Crowflight Minerals, which operates the Bucko Lake nickel mine in Canada's Manitoba province.

Shares in the Canadian company jumped 41,18% on Tuesday morning, to C$0,24 apiece, topping the implied value of the Jinchuan offer.

Based on the current outstanding shares, the offer works out to about C$0,26 a share, which is a 47,3% premium to the company's closing price on Friday, and a 56,8% premium to the 20-day volume weighted average trading price, Crowflight said in a statement.

However, on a fully diluted basis, the offer equates to about C$0,22 a share, which is a 27% premium to Friday's closing price and a 35,1% premium to the 20-day volume weighted average.

The company's special committee of directors is reviewing the offer, which is subject to a due diligence review of the company, all the necessary government and regulatory approvals, as well as approval by Crowflight shareholders.

One of the conditions of the deal, though, is that Jinchuan would take the mine's production itself, which could be an obstacle as Crowflight currently has an offtake agreement with larger miner Xstrata.

The company's special committee was formed after it received a nonbinding expression of interest in late January from Pala Investments Holdings, for the acquisition of the Bucko Lake mine and certain surrounding exploration areas.

Pala, which already owns 26% of the company, proposed to pay C$101,9-million for the assets. Crowflight said at the time that it had entered into a confidentiality agreement with Pala, but had also begun a strategic review of its options and operations.

Crowflight has been advised that Forbes & Manhattan, which is controlled by Crowflight chairperson Stan Bharti, is participating in the offer with Jinchuan, the firm said on Tuesday.

Besides Bucko Lake, Crowflight also owns some nickel, copper and platinum-group metals projects in the Thompson nickel belt and the Sudbury basin.

The Bucko Lake mine declared commercial production in June last year, but was suspended in November after the company had trouble ramping up to full production.

The firm used the three-month shut-down at Bucko Lake to complete ramp development, accelerate mine development and upgrade the backfill plant, and announced last month that milling and nickel shipments had resumed.

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