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November 24, 2009

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Home » Business » Energy

Cash-and-share bid to beef up copper miner

FIRST Quantum Minerals Ltd has agreed to buy Kiwara Plc in a cash and share deal worth US$260 million to expand its copper mining operations in Zambia, the firms said yesterday.

"Given FQM has an unrivalled track record in development and has its flagship mine that it developed nearby, we think the market may give them the benefit of the doubt," Liberum Capital said in a note.

First Quantum, which focuses on copper mining in Africa, said it had received undertakings from shareholders representing 76 percent of Kiwara shares to accept the offer, which has also been recommended by Kiwara's board. Kiwara owns the Kalumbila copper project in Zambia.

"We believe our many years of successful operations in the Copperbelt and Zambia in particular, will be beneficial in the development and eventual operation of the new assets," First Quantum Chief Executive Philip Pascall said about the arrangement.

Under the deal, Kiwara shareholders will receive 0.0085 First Quantum shares and 37.5 pence (62 US cents) for every Kiwara share held.

The implied value per Kiwara share is 75 pence, a 41.5 percent premium to the closing price of Kiwara last Friday.

"Kiwara has recognized that the Kalumbila project, and indeed the license area in general, has potential well in excess of our current resource capability," Kiwara Chairman Colin Bird said.


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