Nice neighbourhood indeed.........Seismic signs from Katanga?
"Potential exists for the return of the Musoshi mine" from Copper Resources Corporation, controlled by Metorex, to DRC parastatal Sodimico.
Author: Barry Sergeant
Posted: Monday , 03 Mar 2008
JOHANNESBURG -
Copper Resources Corporation (CRC LN, £1.84 a share), 45.6% held, and controlled, by Metorex (MTX SJ, R18.70), on Monday announced that the contents of a letter effectively to CRC from the government of the Democratic Republic of the Congo submits the "potential" of a return of the Musoshi mine to DRC parastatal Sodimico.
This reference in the letter, sent to CRC 75% subsidiary Miniere De Musoshi & Kinsenda Sarl (MMK), appears to have gone further than (certainly) public disclosures relating to similar letters sent out to other listed entities with activities in the DRC, mainly in copper cobalt properties in the southern Katanga Province, viz., Anvil, Moto, Lundin, Tiger Resources, Banro, First Quantum, Katanga Mining, Metorex, Mwana Africa, TEAL, and CAMEC (for which selected price and other statistics are shown below).
Lundin on February 19 was the first to disclose receipt of such a letter, first promised by Congolese officials during last month's Mining Indaba in Cape Town, as part of the latest chaotic ongoing mining review in the DRC. The MMK Joint Venture is held 75% by CRC, 5% by Metorex and 20% by Sodimico; MMK holds licences for the Kinsenda and Musoshi mines and the Lubembe property.
In its announcement, CRC says that the letter to MMK also states that under a Ministerial decree issued in 2007, the Musoshi JV "should potentially have observed a stand-still on concluding any transactions". CRC counters that the JV was initially formed in 2005 between the Forrest Group, controlled by long time DRC entrepreneur George Forrest, and Sodimico, "and was formally approved by Presidential Decree, being signed by President Joseph Kabila".
Under the terms of the agreement, according to CRC, Sodimico introduced the mining and exploration prospects to the JV whilst the Forrest Group undertook to provide financial support, including financing the preliminary feasibility study. CRC points out that it has employed some 1,000 former Sodimico employees "who had been unpaid for years", where "only 500 employees were actually required for the continuing operations".
Prior to recent corporate action taken by Metorex to wrest control of CRC, the Forrest Group held about 40% of the shares of CRC, following CRC's earlier acquisition of its 75% shareholding in MMK. The Forrest Group holds numerous other interests across the DRC, most publicly 9% of Toronto-listed Katanga Mining, which recently merged with Nikanor, previously listed in London.
The CRC announcement on its letter went public on Monday a few minutes after 12 noon, Johannesburg time. Some two hours later, Metorex was yet to make a reference to the CRC announcement, either on its website or via the JSE news service. The Metorex stock price has been beaten down in the past while, relative to a group of 38 listed stocks that place material reliance on copper-related earnings.
Selected DRC/Zambia copper stocks
Stock
From
From
Value
price
high*
low*
US$bn
First Quantum
C$91.32
-20.0%
51.7%
6.21
Equinox
C$5.65
-19.3%
189.7%
3.19
Katanga Mining
C$17.00
-39.4%
85.2%
3.36
Camec
£0.54
-32.7%
166.7%
1.20
Metorex
R18.70
-38.5%
19.1%
0.87
Anvil
C$13.48
-33.6%
31.5%
0.96
Teal
C$4.50
-26.2%
28.6%
0.24
Copper Resources
£1.84
-1.9%
124.4%
0.22
ZCI
R11.75
-59.4%
37.4%
0.19
Mwana Africa
£0.38
-55.1%
7.1%
0.18
African Copper
£0.48
-52.5%
2.1%
0.12
Zambezi Resources
£0.14
-52.5%
1.8%
0.05
Africo
C$1.65
-60.5%
106.3%
0.04
African Eagle
£0.09
-46.1%
3.0%
0.03
Simberi
C$0.06
-50.0%
10.0%
0.01
Average
-39.2%
57.6%
Diversified
BHP Billiton
£15.88
-16.3%
65.4%
189.00
Freeport-McMoRan
$100.86
-16.1%
92.1%
38.61
Vedanta
£21.68
-10.4%
86.9%
12.27
Lundin
C$8.41
-46.9%
21.0%
3.28
* 12-month