OTCPK:KATFF - Post by User
Comment by
Sogosohubidu201on Sep 16, 2019 6:07pm
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Post# 30133140
RE:Essential reading
RE:Essential readinghttps://www.bloomberg.com/news/articles/2019-07-18/eurasian-resources-is-said-to-weigh-sale-of-congo-mining-assets
https://www.cnmn.com.cn/ShowNews1.aspx?id=412687
ERG already said that they wanted to sell their Metalkol mine in DRC. There were Chinese buyers wanted to buy it from ERG. One of the potential buyers was China Nonferrous Metal Mining Co. No deal yet, but should watch it closely. The problem is price: ERG asked for $7 - $8 billions USD while the potential Chinese buyers were only willing to offer $3 - $4 billions USD for ERG Metalkol assets. It would be very hard to close the gap.
Interestingly, Goldman estimated NPV of ERG Metalkol at $4.884 billions USD including sunk costs. So potential Chinese buyers are only willing to offer price at 72% NPV average.
Goldman estimated KAT mine at NPV = $17.184 billions USD including sunk costs. I don't think that Glencore is going to sell KAT mine in the next 2-3 years, which is at ramp-up phase unless Chinese companies are willing to offer price at or higher than its NPV value.