Vancouver After a public session held to examine EuroZinc Mining’s (EZM-V), bid for the purchase the Neves Corvo copper mine in Portugal, the jury handling the tendering process has accepted the offer as a conforming bid.
In accordance with the official process, the jury now has up to ten days to report to the Board of Directors of Empresa de Desenvolvimento Mineiro, the Portuguese government owned mining company, that EuroZinc’s bid is in conformance.
Another 20 days will pass before an official notice will inform the public of the winning bid. Within ten days of the official notice, a 10 million Euro deposit must be made and a definitive purchase agreement will be signed. A portion of the funds from EuroZinc’s previously announced $30 million financing have been allocated for this purpose and will be released once official notice has been received. The acquisition must close within 90 days of the date that the definitive agreement is signed.
EuroZinc was the only bidder for the sale of the government of Portugal’s 51% stake in the mining firm Somincor by its January 19, 2004 cut off date. Somincor is a Portuguese company owned 51% by Empresa de Desenvolvimento Mineiro, (EDM), the Portuguese government-owned mining company, and 49% by Rio Tinto (RTP-N).
The lack of bidders is attributed to the recent sharp fall in the US dollar. When Somincor’s stake in the mine was put up for sale in November, the base price was set at 115 million euros, equivalent to US$135 million dollars. It is now about US$146 million.
The Portuguese government is seeking to offload its interest as part of a privatization program, while Rio Tinto has had its share of the mine up for sale for over four years now. In mid 2002 Rio Tinto was ready to hand over the Neves Corvo shares to AIM listed Australian company, Murchison United, but the Portuguese government, reneged on the deal at the last minute.
The Neves Corvo mine produced 330,000 tonnes of copper concentrates in 2003. At the end of 2002, measured resources were pegged at 22.2 million tonnes averaging 5.65% copper. Indicated resources were estimated at 800,000 tonnes averaging 4.40% copper and inferred resources were reported at 7.6 million tonnes averaging 4.03% copper. The mine also has reported an indicated zinc resource of 26 million tonnes averaging 6.40% zinc and an inferred zinc resource of 24 million tonnes averaging 5.55% zinc.
EuroZinc currently owns the Aljustrel zinc mine, which is situated 40 km northwest of the Neves Corvo mine. Aljustrel has been on care and maintenance pending a sustained recovery in zinc prices. The successful acquisition of Neves Corvo and a return to production of Aljustrel will elevate EuroZinc to mid-tier status as a diversified base metal mining company.