EMED looking at buying Rio Tinto (August 02, 2007)

A London-listed junior is in negotiations to acquire Rio Tinto — not the company, but the historic base-metal property in Spain where Rio Tinto Zinc got its start.

EMED Mining (EMED-L) has submitted a proposal to the Andalusian regional government to restart production at the mine, northwest of Seville. Under an option agreement made in May, EMED could acquire a 51% interest in the project for a sum, still to be finalized, around 18 million ($39 million). EMED would have to raise that money to exercise the option.

Over the next four years EMED could pick up additional 10% slices of the project, with a total of 37 million needed to buy the remaining 49%.

EMED would only exercise the option if the project coule get out from under existing liabilities.

The property has a proven and probable reserve of 69 million tonnes grading 0.65% copper, part of a resource — in all categories — of 255 million tonnes grading 0.57%. Preliminary pit designs put the stripping ratio at around 1.3.