takeover near?, page-5

I might suggest some of the comments made by Gecamines over the last few days has had an impact on share price movements.


Congo's Gecamines does not plan more sales to grow
9 February 2012
Source:Reuters News
* Mining asset sale over for now - Gecamines exec
* State miner says 40 pct of funding needs met
By Clara Ferreira-Marques

CAPE TOWN, Feb 8 Congo's state-owned mining company Gecamines has no plans to sell further assets to help it fund an ambitious five-year drive to turn it into a major producer after two decades of dwindling output, Chief Executive Ahmed Kalej Nkand said.

Gecamines, which owns dozens of exploration concessions in the country's copper-producing south and has stakes in more than 20 mining companies, has sold assets including a 20 percent stake in Glencore-operated Mutanda Mining last year.

It was expected to put more on the block as it battles to meet its aim of boosting copper output to 100,000 tonnes a year in 2015, up from around 20,000 tonnes at the moment.

But Kalej Nkand said there were no further plans for sales to help it meet its funding needs, estimated at $631 million.

"We said 40 percent of (Gecamines's) funding needs were covered, and some of those funds came from recent sales. But we do not expect further sales, at least not to finance the rest of the plan," he told an industry conference.

Mines Minister Martin Kabwelulu said the main reason for the earlier sales was the government's difficulties in contributing to the cost of Gecamines' overhaul.

"We did an inventory of all the joint ventures that were not viable ... and we said we have to sell these (stakes) and allow Gecamines to follow its relaunch strategy," Kabwelulu said.

"Now that Gecamines has the necessary funds, I do not think we can allow further sales," he said.

He added Gecamines and other state-owned mining bodies, all aiming to boost Congo's slice of growing global resources revenues, would no longer accept "useless" joint venture deals, which did not give them a significant stake.

Neither official specified how much cash was raised through the divestments.

Success, Kabwelulu said, would come from exploration, on which Gecamines intends to spend $70 million as part of its plans. It could then seek partnerships to develop any finds.

The overhaul of Gecamines, once one of Africa's largest copper producers, is also due to slash its $1.5 billion debt burden and cut back the number of employees, whose average age is currently 55.

MINING INDABA 2012: Gécamines has investment interest from DBSA, AFD
Janie Davies
7 February 2012
Source:Metal Bulletin News Alert Service

Gécamines is looking at a range of options to secure $631 million in funding and has received interest from both the Development Bank of Southern Africa (DBSA) and the Agence Française de Développement (AFD), ceo Ahmed Kalej Nkand told Metal Bulletin on the sidelines of Mining Indaba. The company, formerly a public enterprise in the Democratic Republic of Congo (DRC), aims to be producing 100,000 tpy of copper by 2015 under its strategic development plan, which it presented to delegates at the conference in Cape Town on Tuesday February 7.

Gécamines is considering a number of options to raise the cash including internal financing of assets and improved management of its joint-venture partnerships, but it needs additional funding, Nkand told Metal Bulletin. "[Internal fund raising is] not enough. We are looking outside at traditional banking systems. DBSA has shown interest; AFD has shown interest," he said.

"We want to certify our [copper] reserves - that will be our guarantee and that is where we expect financing to come from. Another source is the better management of our joint-venture partnerships. We expect money to come from those after we have performed our audit," he said. Gécamines has 4 million tonnes of identified copper reserves. Projected copper production for 2012 is around 35,000 tonnes. It holds 23 mining joint ventures with companies including Komoto Copper Co, Tenke Fungurume Mining, Ruashi Mining and Compagnie Miniere du Sud Katanga, as well as two leasing contracts.

Eight of the projects are at production phase, six are under construction and nine are on track to finalise feasibility studies. "The results of the partnerships have not met expectations yet. Hence major focus is now put in place to improve the management of these partnerships," the company said. Gécamines has a budget of $72 million for exploration and a further $331 million to rehabilitate and modernise production units. It also has a mining development budget of $141 million over five years. The company has appointed an international law firm and merchant bank to restructure its liabilities, which stand at an estimated $1.5 billion. The liabilities are mainly made up of social, commercial and financial debt