BIZARRE BURDEN
BIZARRE BURDEN - by JAMIE FREED - 10 December 2009
It appears rather bizarre that Equinox Minerals shares have fallen for the last two days on the prospect of First Quantum Minerals selling its 17 per cent stake in the Zambian copper miner.
First Quantum told investors yesterday that, given its strong balance sheet, there was no financial need to sell the stake, worth $450 million, to fund its $US341 million ($373 million) purchase of the Ravensthorpe nickel laterite mine from BHP Billiton or for building nickel and copper projects.
However, the Canadian-listed miner added that, strategically, it had always said it would sell ''if the opportunity is good'' and that it was not a ''major focus of priority''.
With major miners like BHP and Xstrata complaining about looming copper supply problems because of declining grades and a lack of major discoveries, Equinox is considered one of the industry's most choice takeover targets. It can produce up to 170,000 tonnes of copper a year at its Lumwana mine.
A long list of suitors - including the likes of Xstrata, Anglo American, Vale, Freeport McMoran, Antofagasta, Barrick Gold, China Minmetals, and Chinalco - would be sure to take a good look at Equinox. To date, First Quantum has proven a hurdle to any transaction.
One inference from First Quantum's insistence it would only sell its stake if a good opportunity arose is that it is well aware of the holding's strategic value to potential bidders.
That would point to First Quantum being more likely to hold some sort of internal auction and then selling it at a significant premium than offloading it to institutions at a discount.
If that proves true, there is no good reason for Equinox shares to suffer from fears of an overhang.
from <http://www.brisbanetimes.com.au/business/future-fund-consortium-leads-the-property-charge-20091210-kma8.html>
Ce que l'on conçoit bien, s'énonce clairement, Et les mots pour le dire arrivent aisément. BOILEAU