Katanga fears CAMEC’s motive for special meeting (August 09, 2007)

Takeover target Katanga Mining (KAT-T, KATFF-O) says Central African Mining and Exploration Company (CAMEC) (CEAMF-O, CFM-L) has demanded a special shareholders meeting in an effort to end its shareholder rights plan.

CAMEC told Katanga in early July that it was planning to make an offer on the companys outstanding shares but no formal offer has yet been made. CAMEC said in July that it was considering bidding 15 CAMEC shares for each Katanga share, valuing the company at $1.6 billion.

The companies, which both have copper and cobalt interests, operate in the Democratic Republic of Congo.

In May, Katanga put together a shareholder rights plan to prevent a creeping takeover when a company gains control through progressive ownership without making an offer to all shareholders, which is not allowed under the terms of the plan.

CAMEC already owns 22% of Katanga and has said it has lock-up agreements on 32% of Katangas shares, Reuters reported.

Katanga fears it will be left without a choice in the matter or CAMECs takeover.

Katangas board has appointed an independent committee to review all strategic options it could take.

The company has yet to respond to CAMEC about the proposed shareholders meeting.

Katanga plans to start shipping from its Kamoto copper-cobalt mine complex by December and expects to ramp up to 150,000 tonnes of refined copper and 8,000 tonnes of refined cobalt per year by 2011.

CAMECs flagship operation in the DRC is the Luita copper-cobalt processing facility, which will produce 40,000 tonnes of copper, 3,000 tonnes of cobalt cathode and 3,000 tonnes of cobalt concentrate per year by the end of March 2008, ramping up to 100,000 tonnes of copper cathode and 12,000 tonnes of cobalt cathode by the end of next year.

Katanga shares fell 4% or 89 to $20.76 in Toronto today on a trading volume of 193,000 shares.