Anvil Mining Ltd. (AVM), which produces copper in Africa, said a takeover by Minmetals Resources Ltd. (1208) can proceed after the Democratic Republic of Congo’s state-owned miner agreed not to oppose the deal.
Anvil and Gecamines came to terms for revised commercial agreements for two Congo copper projects, Perth, Australia-based Anvil said yesterday in a statement. Anvil has agreed to pay Gecamines $55 million, it said.
The accords “include confirmation that Anvil’s title to the Kinsevere and Mutoshi projects is valid and in good standing, agreement that all claims and historic allegations of breach are cured,” the company said.
Minmetals said in September it had agreed to acquire Anvil for C$1.3 billion ($1.3 billion) in cash. In October, Anvil said Gecamines was seeking a review of the financial terms of a lease agreement for the Kinsevere project and the joint venture agreement for Mutoshi project before allowing Minmetals’ offer to proceed.
The Hong Kong-based company rose as much as 8.6 percent on Feb. 8 after Congo Mines Minister Martin Kabwelulu said in an interview the parties may resolve issues stalling the deal.
China Minmetals Group, China’s biggest metals trader and Minmetals’ biggest shareholder, has approved the bid based on yesterday’s agreements with Gecamines, Minmetals said in a separate statement.
Anvil owns 95 percent of Kinsevere through a Congolese unit, which in turn holds a minerals lease from Gecamines. Anvil owns 70 percent of Mutoshi through a local subsidiary and the remainder is held by Gecamines.
Anvil has agreed to negotiate with Gecamines to replace current agreements for the Mutoshi project, it said. Anvil will also pay Gecamines $35 per ton for new copper reserves discovered at Kinsevere.
“It’s satisfying for us and for all parties,” Gecamines Chief Executive Officer Ahmed Kalej said yesterday by phone from Cape Town. “It is the fruit of good negotiations that were conducted in a professional manner and all was concluded in the interest of both parties.”
Anvil rose 1.5 percent to close at C$7.96 in Toronto yesterday. The shares have gained 8.4 percent this year.
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