On May 4 Central African Mining and Exploration (CAMEC) (CFM-L) announced it was taking its stake in Katanga Mining (KAT-T) up another 10% to 22% by way of a private deal with certain Katanga shareholders. In addition, CAMEC said it had plans to buy an additional 7% in the near future.
The news is not being welcomed by Katanga.
On May 8 Katanga announced it was filing an application to have the Securities Commission of Ontario issue an order to prohibit CAMEC from making the share purchases. Katanga says it is concerned that CAMEC’s actions go against Ontario’s take-over bid provisions.
Katanga also says that CAMEC has not been in contact with it.
After gaining roughly 12% when the CAMEC share purchase was announced, Katanga shares came off 17 to $15.80 on 226,000 shares in Toronto on May 8.
Katanga is currently rehabilitating mines and plants near Kolwezi in the Katanga province of the Democratic Republic of Congo (DRC). The site is scheduled to ship copper by the end of this year and by 2011 the site is projected to produce 150,000 tonnes of copper and 8,000 tonnes of cobalt per year. The company says it will be one of the world’s lowest cost producers.
For its part, CAMEC says the acquisition is a sign of faith in both the mineral potential of the DRCs copper belt and the growing political stability there.
In the last year the company has developed a SX/EW plant in the DRC and is on track to produce 40,000 tonnes of electro plated copper over the next two years and 6,000 tonnes of cobalt. The plant has a targeted capacity of 100,000 tonnes copper and up to 12,000 tonnes of cobalt cathode and carbonate annually by 2008 and 2009.
It says it is acquiring the Katanga shares for investment purposes.
CAMEC may in future increase or decrease its ownership of securities of Katanga from time to time depending upon factors such as the business and prospects of Katanga and future market conditions, the company said in a statement.
CAMEC shares were off 1.25p to 55p on 14 million shares from trading in London on May 8.
Be the first to comment on "Katanga tries to quell CAMEC’s appetite"