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[rambutan2] 15/3/2006 03:46

lest we forget the zinc angle... From Creamer Media's Mining Weekly News Today Kipushi prospect keeps SA miner's Congo interst alive South African diversified mining group Kumba Resources remains very interested in the Democratic Republic of Congo (DRC), despite years of disappoint-ment owing to the continuing travails of that country. But today the company's focus in the DRC is on one asset in particular – the Kipushi zinc/copper mine. "There is a shortage of zinc-concentrate feedstock to zinc refineries worldwide," Kumba CEO Dr Con Fauconnier recently pointed out to journalists in Johannesburg. The zinc price soared throughout 2005, ending the year at $1 900/t – in mid-2004 it was about $900/t. "Kipushi is one of the few zinc-mining opportunities in the world today," he added. The Kipushi mine is located in the far south of the DRC, some 30 km south-west of Lubumbashi and adjacent to the border with Zambia. Kipushi produced both zinc and copper from 1925 to 1993; production then ceased owing to a lack of foreign exchange to maintain oper-ations, and the mine was placed on a care-and-maintenance basis. Kipushi is described as a world-class deposit with measured and indicated resources of 16,9-million tons, with an average grade of 16,7% zinc and 2,2% copper. This resource is open-ended along strike and also downdip. "It's an attractive project – Kipushi would be about the same size as Rosh Pinah, producing some 120 000 t/y of zinc concentrate," explains Fau-connier. (Rosh Pinah is Kumba's zinc/lead- mine in Namibia.) Kumba is approaching Kipushi through a joint venture (JV) with Canada's Adastra Minerals. The rights to Kipushi are owned by DRC State-owned mining group La Générale des Carrièrres et des Mines (Gécamines), and Adastra originally signed a framework agreement with the Congolese company to develop a rehabilitation programme for Kipushi in 1996, extending this agreement in 1998. In 2000, Adastra – with the approval of Gécamines – entered into an option agreement concerning Kipushi with Kumba (technically, with Kumba's wholly-owned subsidiary, Zincor) and in 2002 this became a JV agreement. The JV was renewed last September. To date, Adastra has spent some $3,5-million on identifying commercially-viable rehabilitation options for Kipushi. Kumba has reportedly invested $3,5-million in the JV, which will be used to fund the bankable feasibility study. Should the project go ahead, by DRC law Gécamines must also have a shareholding in the mine. Fauconnier expects that Kumba and Adastra will each have a stake of "near 50%" in Kipushi, with the rest going to Gécamines. Complicating matters is the current hostile takeover bid for Adastra launched by First Quantum Minerals. At the time of closing for press, Adastra's board had recommended that the company's shareholders reject the First Quantum offer. According to an Adastra news release of February 17, "Adastra's largest shareholder . . ., its largest noninstitutional shareholder . . ., and other major shareholders, which in aggregate hold more than 50% of Adastra's issued share capital ... support the board in rejecting the First Quantum offer". But the issue is not yet played out; First Quantum's offer closes at 17:00, Toronto time, on March 10 (assuming it is not extended). Kipushi is only one of Adastra's projects in the DRC – in fact, it regards a copper-tailings project at Kolwezi as its main asset. It looks as if these other assets are what First Quantum is after: it describes itself as focused on copper, cobalt and gold. Should the company succeed in its takeover bid, its attitude towards Kipushi is not clear – it is conceivable it could seek to sell its share in the zinc project. Kumba, for the next week or so, just has to wait and see. "We have no pre-emptive rights on Adastra's share of Kipushi," said Fauconnier. "Our interest is in Kipushi," he stressed. Whatever happens, Kumba is in an advantageous position because of the offtake opportunties it provides to the project: the South African group is Africa's largest producer of refined zinc. Its Zincor subsidiary operates a 115 000 t/y-capacity electrolytic zinc plant at Springs, east of Johan-nesburg. (Actual zinc production for last year was 102 000 t, owing to the poor quality of the concentrate supplied to the Springs facility.) Kumba also owns a share in the Chifeng zinc smelter, in China. Should the future splitting of Kumba into two companies – Kumba Iron Ore and 'NewCo' – go ahead as planned later this year, the Kipushi project would be assigned to NewCo, along with the Kumba group's other zinc operations and interests.

[delta111] 13/3/2006 16:58

This is a must read: http://www.overthecounterbulletinboard.info

[rambutan2] 13/3/2006 16:57

no, jarvis - although wouldn't necessarily recommend them.

[gardenboy] 13/3/2006 16:37

ram, is that with Halifax ?

[rambutan2] 13/3/2006 16:34

yes, i've got mine in an isa. likewise gsl, acu, egu and a whole bunch of other tsx main listed ones. same goes for anything dual listed on asx.

[arf dysg] 13/3/2006 14:07

I've just realised that AAA might be eligible for an ISA, not because it's on AIM, but because Canadian exchanges qualify for ISA status. I've looked on the inland revenue web site and under "Canada" they just say "Any exchange which is registered for Canadian tax purposes." If the TSX is a major exchange (why shouldn't it be?) then it has to be a "recognised exchange" for U.K. tax purposes. Ergo, I can manouevre my AAA holding into an ISA, although this will most likely take two tax years.

[rambutan2] 09/3/2006 00:53

on drc... http://www.resourceinvestor.com/pebble.asp?relid=17636

[rambutan2] 08/3/2006 14:08

looks good.

[arf dysg] 08/3/2006 14:04

DFS is out! Everything sounds positive. Net present value 3.93 Canadian dollars.

[arf dysg] 24/2/2006 11:51

It's amusing to see First Quantum pleading and whining and begging and saying that it's not fair. They're desperate for our lovely montains of copper and cobalt.

[gardenboy] 23/2/2006 23:20

http://www.first-quantum.com/s/NewsReleases.asp?ReportID=130239&_Title=First-Quantum-Minerals-Responds-to-Adastra-Minerals-Directors-Circular-and-...

[jonwig] 17/2/2006 14:47

As expected, the Toronto opening tells it as it is! (This happened on the day the bid was announced, too!)

[arf dysg] 17/2/2006 12:59

Oh, ho, ho, here comes some action. Up we go.

[jonwig] 17/2/2006 11:32

I can't find the Directors Circular on the website (referred to in the RNS) but Cannacord have written a new, post-bid research note here: http://www.adastramin.com/downloads/assets/Canaccord%2024.01.061.pdf

[jonwig] 17/2/2006 09:16

On a quick scan, this Mitsubishi deal (just announced with the formal rejection) appears to be excellent news. I suppose the share price will have to wait until this afternoon for a firm verdict, but meanwhile I've bought a few more.

[arf dysg] 13/2/2006 13:54

Isn't the letter to shareholders (descirbing reasons to reject takeover bid) due out tomorrow at the latest?

[arf dysg] 10/2/2006 12:38

Shares magazine reports on Adastra results and mentions the takeover bid(yesterday's issue). It's reasonably positive. Shares magazine last week has a letter from a reader mentioning the takeover offer.

[arf dysg] 10/2/2006 10:46

ADVFN should remove the above post. It's a scam. It looks like a classic scam - buy a stock and then email lots of sheep to tell them to buy it to make the price go up.

[Abuse team] 10/2/2006 05:10

Post removed by ADVFN

[rambutan2] 10/2/2006 02:04

and a bit more on it. i might be tempted by a 1:1! From Creamer's Mining Weekly News Today Hostile bid 'severely undervalues us' - Adastra ------------------------------------------------------------------------------- Exploration firm Adastra has claimed that First Quantum's hostile bid for it has severely undervalued the firm and that the share ratio should not be 1:17,5, but rather 1:1. CEO Tim Read on Wednesday claimed that the firm would be contributing 45% of recoverable copper-equivalent resources and on an all-equal basis; its contribution to the combined group would be 55% by 2009. Read was addressing delegates at the 2006 Mining Indaba in Cape Town where global miners are assembled to attend the three-day conference. At First Quantum's stand in the exhibition area, all executives remained tight-lipped about Adastra's presentation and would not comment. This was despite Read's quips that the executives should occupy the front row to "have a clear view of the numbers I am putting up". He said that Adastra would be contributing 21% of copper-equivalent production by 2009, not the seven per cent First Quantum claims. In a month, Adastra is due to release its definitive feasibility study into the Kolwezi tailings project, the jewel in its crown and the reason that First Quantum aims to take over the firm. The study will indicate that 97% or resources can be converted into reserves, argues Read. He also pointed out that firms with projects at this stage saw their share price increase by 98% in a short period of time and that the average premium paid for such shares was 50%, not the six per cent premium offered. Some 51% of the firm's shareholders, which include Merrill Lynch and its founder, have indicated that they will not be supporting the bid. First Quantum's hostile takeover bid was first announced by the firm on January 18, at which point it offered $2,23 a share. This, it said in a statement, was a premium of about 24% at the time. Chairperson Philip Pascal had previously indicated that the offer, which was announced formally on February 2, was at a fair price and offered value to Adastra shareholders. The project, in the Democratic Republic of Congo, has resources of 112-million tons and is expected to benefit the impoverished community, which has a 90% unemployment rate. Finance has been received from the Royal Bank of Scotland to the tune of $75-million, while South Africa's Industrial Development Corporation and Investec have committed $120-million to the project. Already Murray & Roberts Cementation and GRD Minproc have completed the plant design and the firm has indicated it will be making use of a hydraulic mining method. Total capital expenditure is expected to come in at $350-million. Throughput is at 2,3-million tons a year and the mine will produce 33 t to 200 t a year of copper and 5 900 t a year of cobalt. Negotiations are under way to pre sell 50% of the cobalt. South Africa's Industrial Development Corporation and the World Bank's International Finance Corporation will hold equity in the project, leaving Adastra with a majority holding. It is due to start the due-diligence work after the release of the feasibility study.

[gardenboy] 09/2/2006 23:31

ram, that's a great read ! "He started off by inviting any people from First Quantum to move up to the front row so that they could be sure of seeing the figures he was going to display"

[rambutan2] 09/2/2006 10:40

good stuff... http://www.minesite.com/storyFull5.php?storySeq=3302

[ianwc] 08/2/2006 11:36

ball is back in FQM's court. I would expect a second offer at a better price. No doubt FQM are working overtime to suss out what price would be acceptable to major stakeholders in AAA

[arf dysg] 08/2/2006 10:48

RNS item out - presentation in South Africa. It mentions definitive feasibility study out soon: "early March 2006" It mentions project financing: 50% in progress and expressions of interest to finance another 150 million USD. Looks good. I suppose I'd like a few definitions of things like the "export credit tranche" of the debt, the "senior debt" and "senior subordinated debt."