Xstrata bids for Indophil Resources

By James Regan

SYDNEY (Reuters) - Anglo-Swiss miner Xstrata (XTA.L) on Thursday bid $398 million (204.6 million pounds) for Australian-listed Indophil Resources NL (IRN.AX) in a move that would give it full control of a giant copper mine in the Philippines.

Indophil rejected the A$426 million (204 million pounds), or $1 a share, offer as "opportunistic", saying it did not reflect the value of the company. Indophil shares soared 44 percent to a 10-month high of A$1.12, suggesting the market sees scope for a higher offer.

Xstrata has been one of the most acquisitive international mining houses buying copper, zinc and coal mines in Australia and nickel deposits in Canada and Africa as it builds up a diversified commodities powerhouse.

Copper prices have risen by more than a fifth so far this year.

"This is a continuation of the only way Xstrata and other larger companies can actually grow because they are of such a size now that organic growth through exploration will only provide minor growth," said DJ Carmichael & Co analyst Paul Adams, adding this deal would be a good fit for Xstrata.

Xstrata already owns the majority of the rights to the Tampakan copper lode in the southern Philippines' Mindanoa island, regarded as one of the richest in Southeast Asia.

The deposit is estimated to contain 11.6 million tonnes of copper and 14.6 million ounces of gold, which geologists believe can be extracted at a fraction of today's copper and gold selling prices.

Xstrata paid Indophil $41 million for a majority stake in the Tampakan deposit a year ago. Xstrata now has a 62.5 percent in the mine and management control, while Indophil has a 34.2 percent stake with a right to acquire a further 3.3 percent.