  | |
| |
 |
|
| ||
Metorex plunge may hurt dealmaking Posted: Mon, 14 Jan 2008 [miningmx.com] -- THE share price of Metorex is plunging inexplicably and has fallen 38% from its 12-month high at a time of bullish conditions for two of its main products - copper and gold. The fall is particularly embarrassing in terms of Metorex’s bid to minority shareholders in Copper Resources Corporation (CRC) which has just been extended for the second time to January 18. CRC owns three copper projects in the Democratic Republic of Congo (DRC) with resources and reserves totalling up to 2.4 million tonnes of contained copper metal. Metorex bought 38.7% of CRC in July last year plus a 5% stake in its 75% held subsidiary MMK from the Forrest group for R600m. The Metorex share price stood around R24 at the time and it subsequently rose to an all-time high of R29.50. The CRC share price at the time sat around 87p and, when Metorex pitched its equity offer to the CRC minorities, it also included an alternative cash offer of 125p per CRC share. But Metorex shares hit 1725c today before recovering to around 1830c while CRC shares have risen to around 160p. By way of further contrast the reverse takeover of Katanga Mining by Nikanor - both of which are looking at copper and cobalt projects in the DRC - has gone far more successfully. The takeover was approved by shareholders in London on Friday and the Nikanor share price has jumped over the past two weeks from levels around 600p to hit 710p before pulling back to around 682p today. The main reason seems to be renewed bullish sentiment by investors on the prospects for copper which has jumped from $2.80/lb to around $3.34/lb on Nymex over the past month. Metorex CEO Charles Needham commented from London: “The drop in the share price has got us all a bit dumbfounded and, sure, it worries us because it will take a while for the stock to recover from these levels. “Should we look at further corporate activity the problem is that we will have a depreciated currency to use.” Needham said if the drop in share price was the result of market perception that the CRC deal might fall through then this was unfounded. “We are going ahead with our plans regardless of the outcome of the offer which cannot affect what we intend doing. We have already bought 40% in CRC from the Forrest group. “We are in the driving seat running those operations. We would have liked to pick up another 10% through the offer to minorities. So far the acceptances have totalled 6.6%. If we don’t get the 10% acceptance level we are looking for it’s not a train smash,” Needham said. Click Here to subscribe to our daily newsletter
| |||||||||
0% 
