Anvil deal proceeds on new agreements

Finance

Minmetals Resources Ltd’s C$1.3 billion (US$1.27 billion) purchase of Anvil Mining Ltd is to proceed, after Anvil negotiated agreements with both DRC state-owned La Générale des Carrières et des Mines SARL (Gécamines) and the privately-owned Mining Company Katanga SPRL (MCK), which had opposed the deal.

After Minmetals announced its intention to buy Anvil in September 2011, both the parties said their approval was needed before Minmetals could buy Anvil.  

Gécamines holds a 30% stake in Anvil’s Mutoshi joint venture copper project, and the underlying mineral tenures to the Kinsevere copper operation, 95%-owned by Anvil’s DRC subsidiary. MCK holds the remaining 5% of Kinsevere.

In today’s announcement, Anvil said it had concluded new agreements with Gécamines which recognise Anvil’s title to Kinsevere and Mutoshi. Both Gécamines and MCK said they welcome the acquisition by Minmetals, and MCK agreed to suspend all claims for six months while the purchase is finalised.

Anvil will make a US$55 million payment to Gécamines if the deal goes ahead, which includes a part pre-payment of royalties, and will pay the state-owned company US$35/t for new copper reserves discovered at Kinsevere. Minmetals said its parent company, China Minmetals Non-Ferrous Metals Company Ltd, had now approved the deal. It urged Anvil shareholders to tender their stakes for the offer, due to expire on February 16.