JOHANNESBURG (miningweekly.com) – Belgium-based Nyrstar on Monday confirmed that it had approached Australia’s CBH Resources regarding a possible takeover transaction, as it seeks to expand its mining operations.

Nyrstar said it had approached CBH Resources in December, offering A$220-million for all of the outstanding ordinary shares and convertible notes of the company, which produces zinc, lead and silver from its Endeavor mine in New South Wales.

The offer comprised A$0,135 for each CBH ordinary share and 75% of the face value of CBH's convertible notes.

In mid-2009, Nyrstar – the world’s largest zinc smelter – unveiled a strategy to integrate its smelting business by expanding into mining operations.

It had since acquired the three zinc mines in the US from the Glencore group and agreed to take a 19,9% stake in Ironbark, an Australian company developing a zinc/lead deposit in Northern Greenland.

The CBH proposal was conditional on completion of satisfactory due diligence, exclusivity, final approval by the Nyrstar board, execution of a scheme implementation agreement and the maintenance of confidentiality.

Nyrstar said it had not yet received a response from CBH to the proposal.

CBH confirmed the offer and said that it had appointed Clayton Utz and RBC Capital Markets to advise it on the proposal. The Australian company said that RBC had completed the detailed financial work required to assess the merits of the proposal and that it was providing recommendations to the board.

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