Blumont Invests A$116 Million in Copper Miner Discovery MetalsMichelle Yun
Blumont Group Ltd., the best performer in Singapore this year, agreed to invest A$116 million ($110.4 million) in Discovery Metals Ltd. in a deal that could give it control of the copper producer.
Blumont will buy 73.1 million new shares at A$0.12 each in Brisbane, Australia-based Discovery, it said in a statement. It will also pay $100 million for 5-year convertible bonds that would give Blumont as much as 60 percent of Discovery if fully converted.
Discovery, which has a copper mine in Botswana, has slumped 93 percent in Sydney trading this year after a downgrade in reserves and a takeover bid by Chinese billionaire Yu Yong’s Cathay Fortune Corp. was abandoned. Investing in the copper producer would be Blumont’s largest deal to date as it seeks to acquire minerals and energy assets.
“We see good potential in the copper segment with rising incomes and higher demand for consumer products and services requiring copper,” Ines Scotland, Chief Executive Officer of Blumont Copper, a unit of Blumont, said in the statement. “We continue to look for strategic partnerships that will give us a global footprint into the copper resource space.”
Discovery will use the funds from the transaction to reduce its debt and for development, exploration and working capital expenses, Blumont said.