ENRC gains control of Kolwezi tailings

Finance

Eurasian Natural Resources Corp (ENRC) has purchased a 50.5% interest in Camrose Resources Ltd for US$175 million, providing the London-listed company with control of the controversial Kolwezi tailings project in the Democratic Republic of the Congo (DRC).

Camrose holds interests in five copper and cobalt licences in the DRC, including the entire share capital of Highwind Group.

Under a joint-venture agreement concluded at the start of this year with the DRC and the Gecamines (and entities), the Highwind Group has a 70% interest in Metalkol Sarl, which owns the tailings licence to the Kolwezi site.

The Kolwezi tailings project has this year been the subject of international arbitration taken by previous majority owner First Quantum Minerals Ltd after its joint venture with the DRC and Gecamines was cancelled following a government review of the contract.

The Vancouver-based company took the case to arbitration as it believes the DRC and Gecamines breached contract terms, which provided for recourse to resolve disputes.

Commenting on the Camrose purchase, Felix Vulis, ENRC chief executive officer, said: “The transaction accords with ENRC’s stated commodity-driven acquisitions strategy and our belief in the fundamental attractiveness of copper and cobalt.

“Camrose’s assets are contiguous to our existing assets in the region and offer the potential for synergies.”

The transaction will comprise US$50 million paid by ENRC and US$125 million of issued promissory notes (which mature between nine and 24 months). As part of the transaction, ENRC will also provide Camrose with a US$400 million shareholder loan facility.

The deal also included a 64% interest in Africo Resources Ltd, which owns a 75% interest in the Kalukundi copper-cobalt exploitation licence in the Kolwezi district.