Ivanhoe Mines’ deal to sell a stake in its Kamoa copper project to China’s Zijin Mining has received the green light from the Democratic Republic of Congo, which had earlier objected to the sale.
The agreement sees Zijin Mining pay US$412 million to acquire 49.5% of the shares of Kamoa Holding Limited, which owns 95% of the Ivanhoe subsidiary that owns the rich Kamoa copper project in southeastern Congo.
Shares of Robert Friedland’s Ivanhoe Mines rose about 25% on the TSX yesterday on the Reuters report, and the company issued a news release this morning welcoming the DRC announcement.
“Constructive and cordial negotiations between Ivanhoe Mines and the DRC government are continuing to finalize the terms of a definitive agreement to transfer to the government a further 15% interest in Kamoa Copper SA,” the news release stated. “The transaction would increase the DRC State’s aggregate ownership in Kamoa Copper SA to a total of 20% and equally dilute the interests of Zijin and Ivanhoe Mines in the Kamoa Project.”
There were reportedly Congo government concerns over its own stake in Kamoa, which was 5% at the time the Ivanhoe-Zijin deal was announced and will now rise to 20%.
Kamoa is the world’s largest undeveloped high-grade copper discovery, with indicated mineral resources of 739 million tonnes grading 2.67% copper, containing 43.5 billion pounds of copper, and inferred mineral resources of 227 million tonnes grading 1.96% copper, containing 9.8 billion pounds of copper.
Ivanhoe Mines’ Kamoa discovery team was awarded the 2015 Thayer Lindsley award for international mineral discoveries at PDAC for finding the rich copper resource.
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