[miningmx.com] — MID-tier copper producer METOREX LIMITED finds itself in the spotlight, amid news that its chief operations officer Daryll Castle has quit to become CEO of ASX-listed Anvil Mining (Anvil) while market speculation in Johannesburg is swirling around an imminent takeover bid for Metorex itself.
According to market sources, up to three parties could be interested in bidding for Metorex. One of them is believed to be Brazilian resource giant Vale, while another is a Chinese-led consortium.
Metorex put out a cautionary notice on March 29 informing shareholders that it “had entered into discussions which, if successfully concluded, may have a material effect on the price of the company’s securities’.
The company’s share price has risen from around 536c in mid-March to just under 700c currently. According to market sources, the bid price being considered is around 750c.
Metorex CEO Terence Goodlace was not immediately available for comment. Metorex chairperson Rob Still declined to comment when approached.
Metorex’s main asset is the Ruashi copper/cobalt operation in the Democratic Republic of the Congo (DRC), where operations have been brought decisively back on track by Goodlace since he took over as CEO in February 2009. Goodlace was previously chief operations officer for Gold Fields.
Prior to that, a series of technical setbacks had delayed the development and ramp-up of Ruashi with disastrous financial consequences for Metorex.
Metorex also runs the smaller Chibuluma copper mine in Zambia and controls the Kinsenda and Lubembe copper/cobalt projects in the DRC.
Over the past few years Metorex has opted for a strategy of concentrating on its copper operations in the DRC and Zambia. It has disposed of other South African assets such as gold miner Pan African Resources, antimony/gold producer Consolidated Murchison and its fluorspar operations.
Latest production results from Metorex for the March 2011 quarter showed total copper production up by 8% to 13 344 tonnes (t) and total cobalt production up by 10% to 1 041t. Copper and cobalt production specifically from Ruashi had increased by 20% and 10% respectively.
Castle – who is a civil engineer by training – joined Metorex as chief operations officer in 2009. He was previously an executive director of Zungu Investment Company from 2005 to 2009 and, prior to that, an analyst and fund manager with Stanlib Asset Management.
Anvil has been operating in the DRC since 2002, developing the Kinsevere mine which was commissioned in 2007 and which, during 2010, produced 16 500t of copper in concentrate form.
Anvil’s current focus is on completing the Kinsevere stage 2 project at a cost of $400m, which will boost annual production to 60 000t of cathode copper annually.
The writer owns shares in Metorex.
