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Eurasian Natural Resources Corporation PLC: Acquisition of the Remaining 49.5% of the Shares in Camrose Resources Limited and the Outstanding Minority Shareholdings in Certain Camrose Subsidiaries

December 7, 2012

LONDON, Dec. 7, 2012 /CNW/ – Eurasian Natural Resources Corporation PLC
(‘ENRC or, together with its subsidiaries, the ‘Group’) today announces
the proposed private acquisition by its wholly owned subsidiary, ENRC
Congo BV, of the remaining 49.5% of the share capital of Camrose
Resources Limited (‘Camrose’), as well as the outstanding minority
shareholdings in certain Camrose subsidiaries, for an aggregate cash
payment of US$550 million (together, the ‘Acquisition’). The
transaction is expected to complete by 28 December 2012.

Simplifying the Group’s organisational structure and consolidating its
position within the Democratic Republic of the Congo (‘DRC’) are key
strategic priorities for the Group and will allow the Group to optimise
the value of the Camrose assets. The Group expects Camrose’s assets to
generate significant profits and positive cashflows when development is
complete. ENRC will also benefit from increased operational synergies
across its regional copper and cobalt operations, including the
optimisation of material flows, the ability to leverage ENRC’s existing
marketing organisation, as well as the eventual integration of the
processing plants associated with the Roan Tailings and Reclamation
(‘RTR’) Project (formerly referred to as KMT) and other ENRC processing
facilities and the Camrose Group’s extraction licences.

Camrose holds interests in various high quality copper and cobalt
exploitation licences in the DRC, which include:

        --  a 70% indirect interest in Metalkol, which owns the tailings
            exploitation licence for the RTR Project, with DRC state-owned
            entities holding the minority 30% interest. This licence has a
            total resource of 112.8 million tonnes, grading 1.49% copper
            and 0.32% cobalt;
        --  45,400,000 common shares of TSX-listed Africo Resources Limited
            ('Africo'), representing approximately 64% of Africo. Africo
            owns an indirect 75% interest in Swanmines Sprl which holds the
            Kalukundi permit, the remaining 25% of which is held by
            Gecamines; and
        --  a 55% indirect interest in La Congolaise des Mines et de
            Developpement Sprl ('Comide'), covering four licences, with a
            total resource of 34.7 million tonnes, grading 2.02% copper and
            0.23% cobalt.

Near-term production potential from the Camrose assets is approximately
100 thousand copper contained tonnes per annum, with capital
expenditure in 2013 estimated at around US$300 million.

The remaining 49.5% of Camrose and a 50% interest in Daletona Properties
Limited will be purchased from Cerida Global Limited (‘Cerida’), while
the outstanding minority stake in Comide will be purchased indirectly
through Cerida, as well as from Straker International Corp.
(‘Straker’). In addition, ENRC Congo BV will also acquire one issued
share in each of Akam Mining Sprl (‘Akam’) and Simplex Holding Sprl
(‘Simplex’), which are subsidiaries of Camrose, from Mr Medard
Palankoy.

The cash consideration payable by ENRC Congo BV on completion of the
Acquisition (‘Completion’) will be satisfied by:

        --  ENRC Congo BV paying to Metalkol (on behalf of Cerida) the
            total amount of principal and accrued interest outstanding and
            owing to Metalkol as at Completion under a US$5,000,000 loan
            agreement effective as of 13 October 2010 and entered into
            between Metalkol (as lender) and Cerida (as borrower) (the
            "Metalkol Loan"). Assuming that Completion takes place on 28
            December 2012 and no repayments are made prior to such date,
            the total amount of principal and accrued interest outstanding
            and owing to Metalkol in respect of the Metalkol Loan is
            expected to be US$5,883,333; and
        --  ENRC Congo BV paying the balance of the consideration owing to
            Cerida (equal to US$550 million less the total amount payable
            to Metalkol to discharge the Metalkol Loan) in cash at
            Completion for the benefit of Cerida.

As a result of the Acquisition, Comide will be indirectly wholly owned
by ENRC. Following Completion, Metalkol will remain 30% owned by DRC
state-owned entities and Gecamines will continue to hold the minority
25% stake in Swanmines (the remaining 75% of which is held indirectly
by Africo, in which ENRC Congo BV will hold an indirect 64% interest).

Cerida is being treated as a related party of ENRC as a consequence of
its interest in Camrose. Cerida is an indirect, wholly owned subsidiary
of Fleurette Properties Limited (‘Fleurette’), whose entire issued
share capital is, in turn, indirectly and wholly owned by a
discretionary trust for the benefit of the wife and children of Mr. Dan
Gertler. Fleurette and its subsidiary, Straker, are associates of
Cerida. Mr. Palankoy holds the share in Akam and Simplex as nominee for
other subsidiaries of Camrose. As far as ENRC is aware, Mr. Palankoy is
not an associate of Cerida but is a lawyer with the DRC firm Cabinet
Palankoy and acts for the Fleurette group. However, because Mr. Medard
Palankoy is a director of the operating subsidiaries of Camrose he is
also being treated as a related party for the purposes of the
Acquisition.

The proposed transaction constitutes a related party transaction under
the Listing Rules and, as a result, requires the approval of ENRC
shareholders at a General Meeting, which is to take place on Friday, 28
December 2012. A circular containing further details of the proposed
transaction and setting out the notice of the General Meeting and the
resolution required to approve the proposed transaction will be sent to
ENRC shareholders today. The circular includes an updated Competent
Person’s Report on the mineral assets of Comide and Metalkol by SRK
Consulting.

The Board of Directors of ENRC, which has been so advised by Morgan
Stanley, considers the Acquisition to be fair and reasonable so far as
ENRC Shareholders are concerned. In providing its advice to the Board
of Directors of ENRC, Morgan Stanley has taken into account the Board
of Directors’ commercial assessments of the Acquisition. In addition,
the independent non-executive Directors of ENRC, who have been so
advised by Lazard, consider that the terms of the Acquisition are fair
and reasonable so far as ENRC Shareholders are concerned. In providing
its advice to the independent non-executive directors of ENRC, Lazard
has taken into account the independent non-executive Directors’
commercial assessments of the Acquisition.

The Board considers the Acquisition to be in the best interests of ENRC
Shareholders as a whole. Accordingly, the Board unanimously recommends
ENRC Shareholders to vote in favour of the Resolution at the General
Meeting.

Commenting on the proposed transaction, Felix J Vulis, Chief Executive
Officer of ENRC, said: “Consolidating our ownership of Camrose will be an important step
forward for the Group, enabling us to gain maximum benefit from the
development of these assets and to continue to support our strategy and
ambition of becoming a material African copper producer.”

Mehmet Dalman, Chairman of ENRC, said: “This transaction will successfully complete our long term strategy of
consolidating our African copper and cobalt interests, enabling us to
take full control and responsibility for these assets to deliver
significant value to our shareholders. This transaction is an integral
part of the corporate governance and company structure optimisation
which I set as a key priority when I assumed chairmanship. The
transaction creates one of the largest copper producers in the African
copperbelt, targeting in excess of 200 thousand tonnes per annum of
copper over the next 5 years”.

There will be a conference call to discuss the proposed transaction at
9:30am on Monday, 10 December 2012. The dial-in number is +44(0)20 3140
8286 and the pass code is 8407438.

Additional Information

Camrose Summary Financial Information:
The gross assets of Camrose as at 31 December 2011 were US$305 million
and as at 30 June 2012 were US$326 million. For the year ended 31
December 2011 and for the six month period ended 30 June 2012
(unaudited), the Camrose group made a loss after tax of US$21.8 million
and US$14.8 million respectively.

Key Individuals:
The key individuals important to the Camrose group are as follows:

Africo:

(a)     Chris Theodoropoulos – Chairman

Mr. Theodoropoulos received his civil law degree (BCL) in 1981 and his
common law degree (LLB) in 1982, both from McGill University. From 1984
to 2007 he practiced law principally in the fields of corporate,
securities, mining and commercial law involving publicly traded
companies. Mr. Theodoropoulos has held a number of directorships in
public companies involved in the mining and technology sectors and has
also been involved in the resolution and settlement of commercial
disputes.

(b)     Larry Okada – Interim Financial Officer

Mr. Okada is a Chartered Accountant in British Columbia and Alberta as
well as a Certified Public Accountant in Washington State. Mr. Okada
has been in public practice with Deloitte & Touche, his own firm and
PricewaterhouseCoopers LLP over the past 35 years. He sits on a
committee with the Institute of Chartered Accountants of British
Columbia. Mr. Okada is currently the Chief Financial Officer for BC
Gold Corp., and has been involved with numerous public mining companies
over the past 32 years.

Comide:

(a)     James Bethel – General Manager (“Directeur Général”)

Mr. Bethel is an experienced mining engineer, currently heading up the
Copper & Cobalt division of ENRC in the DRC and Zambia. Prior to this,
he was responsible for the DRC West Operations, which included mining
and processing operations in Comide and Roan Prospecting & Mining SPRL,
a Group company. He was also previously responsible for Congo Cobalt
Corporation Sprl (“CCC”), the in-house mining contracting services
company. He has extensive experience within the mining industry and was
the Head of Technical Services for ENRC, prior to his secondment to the
DRC West Operations and CCC. Mr. Bethel is seen as a key contributor to
the business, having played a significant role in new business
development and expansion.

(b)     Georges De Gersigny – Financial Manager

Mr. De Gersigny has extensive finance experience within the mining
industry. He is currently the Finance Manager of ENRC’s DRC West
Operations, which includes the Camrose group. Prior to this, he was the
Finance Controller for Boss Mining S.p.r.l., a company within the
Group. Prior to joining the Group he held management positions within
the finance departments of AngloGold Ashanti Group and Shell.

Metalkol:

Metalkol has yet to commence operations and there are currently no ENRC
representatives on the Metalkol board. At Completion, all Cerida
appointed directors will resign and ENRC appointed directors will be
appointed to the Metalkol board.
Once Metalkol has commenced operations, it is anticipated that James
Bethel will be General Manager (“Directeur General”) of Metalkol and
Georges De Gersigny will be Financial Manager of Metalkol.

About ENRC
ENRC is a leading diversified natural resources group, performing
integrated mining, processing, energy, logistics and marketing
operations. The operations comprise: the mining and processing of
chrome, manganese and iron ore; the smelting of ferroalloys; the
production of iron ore concentrate and pellet; the mining and
processing of bauxite for the extraction of alumina and the production
of aluminium; the production of copper and cobalt; coal extraction and
electricity generation; and the transportation and sales of the Group’s
products. The Group’s production assets are largely located in the
Republic of Kazakhstan; other assets, notably the Other Non-ferrous
Division, are mainly located in Africa; the Group also has iron ore
assets in Brazil. In H1 2012 the Group’s entities employed on average
78,430 (H1 2011: 75,050) people. The Group currently sells the majority
of its products to Russia, China, Japan, Western Europe and the United
States. For the six months ended June 30 2012, the Group had revenue of
US$3,246 million (H1 2011: US$4,011 million) and profit attributable to
equity holders of the Company of US$463 million (H1 2011: US$1,166
million). ENRC has six operating Divisions: Ferroalloys, Iron Ore,
Alumina and Aluminium, Other Non-ferrous, Energy and Logistics. ENRC is
a UK company with its registered office in London. ENRC’s shares are
quoted on the London Stock Exchange (‘LSE’) and the Kazakhstan Stock
Exchange (‘KASE’). For more information on ENRC visit the Group’s
website at www.enrc.com.

Morgan Stanley & Co. Limited is acting as financial adviser to ENRC and
no one else in connection with the matters described in this
announcement. In connection with such matters, Morgan Stanley & Co.
Limited, its affiliates and their respective directors, officers,
employees and agents will not regard any other person as their client,
nor will they be responsible to any other person for providing the
protections afforded to their clients or for providing advice in
relation to the proposed transaction, the contents of this announcement
or any other matter referred to herein.

Lazard & Co., Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for
the independent non-executive directors of ENRC and no one else in
connection with the provision of the aforementioned related party
opinion relating to the Acquisition and will not be responsible to any
other person for providing the protections afforded to clients of
Lazard & Co., Limited or for providing advice in relation to the
Acquisition or the other matters described in this announcement.
Neither Lazard & Co., Limited nor any of its affiliates owes or accepts
any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise) to
any person who is not a client of Lazard & Co., Limited in connection
with any statement contained herein or otherwise.

Forward-looking Statements

This announcement includes statements that are, or may be deemed to be,
‘forward-looking statements’. These forward-looking statements can be
identified by the use of forward-looking terminology, including the
terms ‘believes’, ‘estimates’, ‘plans’, ‘projects’, ‘anticipates’,
‘expects’, ‘intends’, ‘may’, ‘will’, or ‘should’ or, in each case,
their negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or
intentions. These forward-looking statements include matters that are
not historical facts or are statements regarding the Group’s
intentions, beliefs or current expectations concerning, among other
things, the Group’s results of operations, financial condition,
liquidity, prospects, growth, strategies, and the industries in which
the Group operates. Forward-looking statements are based on current
plans, estimates and projections, and therefore too much reliance
should not be placed upon them. Such statements are subject to risks
and uncertainties, most of which are difficult to predict and generally
beyond the Group’s control. By their nature, forward-looking statements
involve risk and uncertainty because they relate to future events and
circumstances. The Group cautions you that forward-looking statements
are not guarantees of future performance and that if risks and
uncertainties materialise, or if the assumptions underlying any of
these statements prove incorrect, the Group’s actual results of
operations, financial condition and liquidity and the development of
the industry in which the Group operates may materially differ from
those made in, or suggested by, the forward-looking statements
contained in this announcement. In addition, even if the Group’s
results of operations, financial condition and liquidity and the
development of the industry in which the Group operates are consistent
with the forward-looking statements contained in this announcement,
those results or developments may not be indicative of results or
developments in future periods. A number of factors could cause results
and developments to differ materially from those expressed or implied
by the forward-looking statements including, without limitation,
general economic and business conditions, industry trends, competition,
commodity prices, changes in regulation, currency fluctuations, changes
in business strategy, political and economic uncertainty. Subject to
the requirements of the Prospectus Rules, the Disclosure and
Transparency Rules and the Listing Rules or any applicable law or
regulation, the Group expressly disclaims any obligation or undertaking
publicly to review or confirm analysts expectations or estimates or to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any changes in the Group’s
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based. Nothing in this
announcement should be construed as a profit forecast. The forward
looking statements contained in this document speak only as at the date
of this document.

A copy of this announcement will be available on ENRC’s website at www.enrc.com.

SOURCE Eurasian Natural Resources Corporation PLC


Source: PR Newswire