Metall acquires smelting assets

Toronto-based Metall Mining (TSE) has bought certain copper smelting and refining assets from controlling shareholder Metallgesellschaft of Germany in a deal worth $171 million.

Metall acquired a 35% interest in Norddeutsche Affinerie in Hamburg, a 40.35% interest in Montanwerke Brixlegg in Brixlegg, Austria, and an option to acquire a controlling interest in the proposed Gresik copper smelter project in Indonesia.

To pay for the assets, Metall will issue about 15.9 million shares at $10.75 per share to its parent. The deal, which regulators have yet to approve, will see Metallgesellschaft increase its interest in Metall to about 68%. The two companies will not proceed with a proposed primary and secondary offering of common shares of Metall because of poor market conditions. Copper was trading recently in New York below US80 cents per lb.

Meanwhile, Metall has agreed in principle to buy an additional 7.5% of the ordinary shares and 8.7% of the preferred shares of OK Tedi Mining from Degussa of Germany for US$35 million. Metall says the deal will double its interest in OK Tedi, the principal asset of which is an open-pit copper-gold mine in Papua New Guinea.

And Metall and Poseidon Gold of Australia have formed a joint-venture company, PosMetall Gold International, into which Metall has transferred or intends to transfer gold projects, including the Troilus property in northwestern Quebec. The two companies continue to talk of financing and the inclusion of other gold properties owned by them in the joint venture.