Charles Needham, MD, Metorex
Send this article to a friend
Print this page

» Glencore swoops on Metorex target
» Metorex will take an M&A breather after CRC deal - Charles Needham, CEO
» Metorex stands firm on CRC deal
» Metorex buys more DRC copper assets
» Metorex targets 70,000t/year copper

> JSE:METOREX LIMITED:
203c 0%
If you want to share this article, simply sign into one of these sites and select your network. It’s that easy Click here to find out more about how to use this button

CRC revokes 45m shares placed with Glencore
Allan Seccombe
Posted: Tue, 20 Nov 2007

[miningmx.com] -- COPPER RESOURCES CORP. (CRC) will revoke the issue of 45 million shares to Glencore as Metorex prepares to issue documents to minority shareholders and makes plans around CRC’s assets in the Congo.

The board of AIM-traded CRC decided the independent directors Sam Jonah and Mitchell Alland –both of whom subsequently resigned their positions – had acted outside their mandate by offering the shares to the Swiss-based commodity trader.

The motivation for the placing of shares with Glencore is not understood. It would have given Glencore a 36% stake in CRC just as Metorex launched its offer to mop up minorities' shares.
no affect on our bid at all
The board, which has appointed Bruno Collins and James Mooney as new independent directors, will inform AIM, its NOMAD and Glencore that the placing of the 45 million shares was unauthorised and will not happen.

In the meantime, Metorex will post the offer documents to minority shareholders within a week. The offer will be open for 21 days. The offer documents had been delayed by onerous regulatory processes.

Metorex is offering 73 of its shares for every 100 CRC shares, which is similar to the $600m scrip offer it made for the Forrest Group’s 39% stake in CRC.

Based on the Metorex share price of 204 pence each on the last business day before it launched the minority offer, the CRC shares were valued at 149 pence each, giving the AIM-traded company a value of £120.7m.

“This issue (around Glencore) has had no affect on our bid at all,” Metorex CEO Charles Needham told Miningmx.

Once the documents are posted Metorex will take a position on the CRC board and attend the extraordinary shareholder meeting called for by a block representing about 10% of CRC’s shares. It’s not immediately clear why the meeting has been called or what will be discussed.

If Metorex gains sufficient shares, the JSE-listed company, which has a presence on the main board in London, is unlikely to retain the AIM listing.

CRC holds 75% of Miniere De Musoshi Et Kinsenda Sarl (MMK). Parastatal mining company Sodimico holds the remaining 25%. As part of the transaction Metorex will acquire a further five percent in MMK from Sodimico.

Metorex will need to spend between $100m and R140m at the Kinsenda project to produce 30,000 tonnes/year of copper in concentrate from around July 2009. CRC had originally planned to bring Kinsenda into production sooner, but Needham said that was too optimistic.

Metorex has, through the Forrest Group, one of the most powerful companies in the DRC, been talking to Kinsenda’s management and is pushing for faster de-watering of the mine.

Metorex has brought mining, shaft and metallurgical consultants to the project. It has had it in-house geologists and metallurgists going over the project.

The bulk of the capital will go towards a processing plant, worth about $60m and the remainder will go towards buying underground equipment and machinery, refurbishing the shaft and underground infrastructure as well as development.

Click Here to subscribe to our daily newsletter
The Forrest Group brings it expertise in mining, construction and cement to the project.

George Forrest, a DRC veteran and head of Forrest Group, said the transaction would unlock synergies between Metorex’s Ruashi mine and the CRC’s Kinsenda mine.

“We like what they are doing at Ruashi,” Forrest told Miningmx during a recent visit to the DRC.

Phase one at Ruashi will produce 10,000 tonnes of copper and 1,000 tonnes of cobalt once the bugs have been worked out of the system. Phase II will lift production to 45,000 tonnes of copper and 3,500 tonnes of cobalt. Production in the second phase will start in January 2008.

At the Musoshi project, where cobalt-bearing tailings are being treated, Metorex plans a small capital outlay to boost increase the furnace’s capacity and grow production by 25%. Needham did not immediately have the cobalt production figures to hand.

“Musoshi must become a profit centre on its own,” he said.

Needham reiterated a previous assertion he made to Miningmx that Metorex would not keep the Hinoba-an copper project in the Philippines. CRC has a 92.5% economic interest in the two porphyry copper deposits, which pre-feasibility studies have shown to contain some two billion pounds of recoverable copper.