Increased cash offer for Kaz Minerals accepted by committee
An increased offer of 780p-a-share for Kaz Minerals has been "unanimously recommended" by the company's Independent Committee.
It marks a 140p increase on October's offer, and reflects a 14 percent spike in copper prices. Bidco made the original £3 billion cash offer at the end of October (click here). Kaz Minerals is currently trading at 797.20p.
The new offer values the entire issued and to be issued share capital of KAZ Minerals at approximately £3.7 billion, and represents a premium of approximately:
- 22% to the Original Offer price of 640 pence in cash for each KAZ Minerals Share;
- 52% to the Closing Price of 512.4 pence per KAZ Minerals Share on 2 October 2020 (being the last Business Day prior to agreement in respect of the Original Offer having been reached with the Independent Committee);
- 37% to the Closing Price of 570.8 pence per KAZ Minerals Share on 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement);
- 42% to the volume-weighted average price of 549.2 pence per KAZ Minerals Share for the one-month period ended 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement); and
- 54% to the volume-weighted average price of 505.8 pence per KAZ Minerals Share for the six-month period ended 27 October 2020.
Oleg Novachuk, Chairman of Bidco, said: "KAZ Minerals must now focus on the execution of a higher risk, capital intensive strategy to deliver the Baimskaya project. Accordingly, we believe that KAZ Minerals' long term interests are now best served as a private organisation."
The Baimskaya project is expected to start production by the end of 2027 and have an annual ore processing capacity of 70 Mtpa.
Kaz Minerals' full year copper production totalled 305.7 kt (FY 2019: 311.4 kt), 2% above guidance range with strong performance across all divisions (click here).
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.