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4/14/08

Spooky about Global Copper, no?

There I was, in my own little dream world, writing up on GLQ.to yesterday and thinking it'd sell before the end of this year.

Today, this news hits:

"....TORONTO, April 14 (Reuters) - Teck Cominco Ltd (TCKb.TO: Quote, Profile, Research) will acquire Global Copper Corp (GLQ.TO: Quote, Profile, Research) in order to gain its Relincho copper-molybdenum deposit in Chile, which the deal values at about $415 million, the Canadian companies said on Monday.

The addition of Relincho to Teck's portfolio will add about 25 percent to the miner's measured and indicated copper resources, its chief executive said in a statement.

Under the deal, Global shareholders will receive C$12 or 0.26667 of a Teck Class B subordinate voting share per Global common share, subject to pro-ration. They will also receive one share of the new company, to be called Lumina Copper Corp....."

This solves that liquidity problem i was talking about, and I'll bet a full US Dollar that I won't be the only person with ready cash looking to rotate into a similar play.

How long before the market wakes up to Los Andes Copper now?

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So this morning GLQ.to is trading at C$13.60. The deal with Teck depends on the arbitrage at any given moment, of course, but right now it seems the market is pricing GLQ's other assets at C$1.80 a share.

So let's have a quick look at what those assets are. Here's the relevant info, ripped from the GLQ website. After a couple of Otto-notes:
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TACA TACA: ARGENTINA Porphyry Cu-Au Deposit

* 75% interest optioned to Rio Tinto - Jan 2008
* 90 km from Escondida mine (world's largest
copper mine)
* 13 mining concessions (2,546 hectares)
* NI 43-101 Technical Report
* Significant amounts of supergene and hypogene
copper, molybdenum and gold mineralization

SAN JORGE: ARGENTINA Porphyry Cu-Au Deposit

* Optioned to Coro Mining
* 110 km NW of Mendoza
* Oxide cap present, excellent potential for
starter pit
* Good infrastructure
* NI 43-101 Technical Report

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1. The San Jorge project is in Mendoza. Mendoza has a "no mining" order in place, and i'm not holding my breath
on it anymore.Argentina is making Venezuela look
progressive these days.

2. Taca Taca is in Salta, and that means miner friendly.Getting a 25% free ride, it seems.

3. As well as these two assets, GLQ also holds 13% of LA.v and a 2% net smelter return at the Vizcachitas project.

4. GLQ also holds around $30m in cash at bank (but that's approximate)

So all in all, the market is saying right now that this little bunch is worth about$60m. The 13% of LA.v is worth
$5.4m right now.The NSR is a long
way off in the future, and the San Jorge asset is no great thing. This leaves
the
25% of Taca Taca as a free ride and the cash. Is Taca Taca worth $25m right now? Debatable. I'd advise
holders of GLQ to take the C$13.60 on offer right now
and buy more LA.v.