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Eurasian Natural Resources Corporation PLC: Acquisition Of The Remaining 49.5% Of The Shares In Camrose Resources Limited And The Outstanding Minority Shareholdings In Certain Camrose Subsidiaries

LONDON, Dec. 7, 2012 /CNW/ - Eurasian Natural Resources Corporation PLC ('ENRC or, together with its subsidiaries, the 'Group') today announces the proposed private acquisition by its wholly owned subsidiary, ENRC Congo BV, of the remaining 49.5% of the share capital of Camrose Resources Limited (' Camrose'), as well as the outstanding minority shareholdings in certain Camrose subsidiaries, for an aggregate cash payment of US$550 million (together, the 'Acquisition'). The transaction is expected to complete by 28 December 2012.

Simplifying the Group's organisational structure and consolidating its position within the Democratic Republic of the Congo ('DRC') are key strategic priorities for the Group and will allow the Group to optimise the value of the Camrose assets. The Group expects Camrose's assets to generate significant profits and positive cashflows when development is complete. ENRC will also benefit from increased operational synergies across its regional copper and cobalt operations, including the optimisation of material flows, the ability to leverage ENRC's existing marketing organisation, as well as the eventual integration of the processing plants associated with the Roan Tailings and Reclamation ('RTR') Project (formerly referred to as KMT) and other ENRC processing facilities and the Camrose Group's extraction licences.

Camrose holds interests in various high quality copper and cobalt exploitation licences in the DRC, which include:
  • a 70% indirect interest in Metalkol, which owns the tailings exploitation licence for the RTR Project, with DRC state-owned entities holding the minority 30% interest. This licence has a total resource of 112.8 million tonnes, grading 1.49% copper and 0.32% cobalt;
  • 45,400,000 common shares of TSX-listed Africo Resources Limited ('Africo'), representing approximately 64% of Africo. Africo owns an indirect 75% interest in Swanmines Sprl which holds the Kalukundi permit, the remaining 25% of which is held by Gecamines; and
  • a 55% indirect interest in La Congolaise des Mines et de Developpement Sprl ('Comide'), covering four licences, with a total resource of 34.7 million tonnes, grading 2.02% copper and 0.23% cobalt.

Near-term production potential from the Camrose assets is approximately 100 thousand copper contained tonnes per annum, with capital expenditure in 2013 estimated at around US$300 million.

The remaining 49.5% of Camrose and a 50% interest in Daletona Properties Limited will be purchased from Cerida Global Limited ('Cerida'), while the outstanding minority stake in Comide will be purchased indirectly through Cerida, as well as from Straker International Corp. ('Straker'). In addition, ENRC Congo BV will also acquire one issued share in each of Akam Mining Sprl ('Akam') and Simplex Holding Sprl ('Simplex'), which are subsidiaries of Camrose, from Mr Medard Palankoy.

The cash consideration payable by ENRC Congo BV on completion of the Acquisition ('Completion') will be satisfied by:
  • ENRC Congo BV paying to Metalkol (on behalf of Cerida) the total amount of principal and accrued interest outstanding and owing to Metalkol as at Completion under a US$5,000,000 loan agreement effective as of 13 October 2010 and entered into between Metalkol (as lender) and Cerida (as borrower) (the "Metalkol Loan"). Assuming that Completion takes place on 28 December 2012 and no repayments are made prior to such date, the total amount of principal and accrued interest outstanding and owing to Metalkol in respect of the Metalkol Loan is expected to be US$5,883,333; and
  • ENRC Congo BV paying the balance of the consideration owing to Cerida (equal to US$550 million less the total amount payable to Metalkol to discharge the Metalkol Loan) in cash at Completion for the benefit of Cerida.

As a result of the Acquisition, Comide will be indirectly wholly owned by ENRC. Following Completion, Metalkol will remain 30% owned by DRC state-owned entities and Gecamines will continue to hold the minority 25% stake in Swanmines (the remaining 75% of which is held indirectly by Africo, in which ENRC Congo BV will hold an indirect 64% interest).

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