Central African Mining & Exploration Company Plc
('CAMEC' or 'the Company')
Response to Reports Re Offer for Katanga Mining Limited
CAMEC, the fully integrated exploration, production and investment company, makes the following statement in response to media reports regarding comments made by Gecamines and Mr Victor Kasongo, Vice-Minister of Mines, in relation to CAMEC's offer for Canadian listed Katanga Mining Limited ("Katanga").
CAMEC has the support of the majority of Katanga's shareholders as a result of its acquisition, in the open market, of 22% of Katanga's shares and also has entered into agreements with certain shareholders representing approximately another 32% of the outstanding shares of Katanga pursuant to which such shareholders have agreed to accept the Offer, within the context of Katanga's shareholder rights plan.
CAMEC believes that there are no legal or other grounds on which anyone can oppose CAMEC's offer for Katanga and questions whether the opposition to CAMEC acquiring Katanga emanates from political pressure exerted by rival commercial entities which are also interested in acquiring that company.
CAMEC has long standing relationships with the government of the DRC and Gecamines and looks forward to meeting to discuss the potential benefits of the transaction to the economic development of the region.
When CAMEC first acquired its 22% stake in Katanga there were negative assertions made by Mr Victor Kasongo opposing the move. These assertions have since been refuted. CAMEC also notes that recent similar transactions in the DRC involving companies other than CAMEC have not attracted such opposition. These include:
. Freeport McMoRan's acquisition of Phelps Dodge which held a 57.75% stake in DRC based Tenke Mining Corporation
. Separately, Lundin Mining Corporation acquired a 24.75% interest in Tenke
. RP Capital Consortium's acquisition of 20% of Nikanor plc which has projects adjacent to Katanga's operations
. RP Capital's acquisition of 15.7% of Katanga
CAMEC has invested over $150 million in its DRC projects and is the only non-state company producing copper cathode in the DRC, and is committed to the development of the DRC resource sector. CAMEC is working closely with Gecamines, its joint venture partner in these projects, and also manages an active social programme to support local schools, housing and hospitals. CAMEC employs 3,000 people in the DRC.
Phil Edmonds, Chairman of CAMEC, said:
"CAMEC believes that there are no legal or other grounds on which anyone and particularly Mr Victor Kasongo can possibly object to CAMEC's offer for Katanga and in recent similar transactions no objections have been made. CAMEC has a strong record of fast-tracking developments and is committed to bringing all of Katanga's projects into production on or ahead of schedule.
"It is the intention of CAMEC to work with Gecamines to ensure the DRC maximises its position and benefits to the full from the developments being undertaken by CAMEC.
"It is evident that shareholders of Katanga and CAMEC recognise the commercial benefits of combining the two entities as reflected in the increased value attributed to both companies since the announcement."
For further information please visit www.camec-plc.com or contact:
Phil Edmonds / Andrew Groves CAMEC Tel: 0845 108 6060
Jonathan Wright Seymour Pierce Ltd Tel: 020 7107 8000
Ben Brewerton / Jon Simmons Financial Dynamics Tel: 020 7269 7279
Notes to Editors: Background to the Offer
CAMEC is bidding for Katanga, which is a publicly traded company. It has acquired, in the open market, 22% and has also entered into agreements with certain shareholders representing approximately another 32% of the outstanding shares of Katanga pursuant to which such shareholders have agreed to accept the Offer, within the context of Katanga's shareholder rights plan.
CAMEC has already invested more than US$150 million in the DRC, including the construction of a copper and cobalt SX/EW facility at Luita in the state of Katanga. This is targeted to produce 40,000 tonnes of copper and 6,000 tonnes of cobalt, as metal and concentrate, per annum by end of March 2008. The plant has a targeted annual template capacity of 100,000 tonnes of copper cathode and 12,000 tonnes of cobalt cathode by the end of 2008.
As stated in the release dated 11 July 2007, the rationale for the Offer is to create one of Africa's largest copper and cobalt producers. CAMEC understands the need for investment in the DRC and the necessity for end product to be generated within the country. CAMEC has underlined its commitment to development of the DRC resource sector with its investment programme and believes that it is one of the few companies to have fulfilled its commitments to the country.
It is the intention to fast track the development of Katanga's projects, utilising CAMEC's logistics operation which was instrumental in constructing the Company's Luita metallurgical facility within budget and on schedule. It is CAMEC's intention to achieve, by 2010-11, a combined annual copper production of circa 250,000 tonnes and have the capacity to produce 20,000 tonnes per annum of cobalt.
By consolidating the assets of the two companies, the enlarged group will be well placed to become the pre-eminent copper cobalt company in the DRC with quantified resources and production of both copper and cobalt.