Blumont invests in Brisbane copper firm
A$116m shares, bonds deal could give it control of Discovery Metals
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A$116m shares, bonds deal could give it control of Discovery Metals
Jasmine Ng
20 September 2013
Blumont Group is investing A$116 million (S$137 million) in Discovery Metals - a deal that could give it control of the Brisbane- based copper explorer.
Blumont Copper, a joint venture with Australian businesswoman Inés Scotland, will buy 73 million new shares at 12 Australian cents each in Discovery, the company said in a filing to the Singapore Exchange yesterday.
It will also pay US$100 million for five-year convertible bonds that would give Blumont up to 60 per cent of Discovery if the bonds are fully converted.
The investment in Discovery would be Blumont’s largest deal to date as it seeks to acquire minerals and energy assets.
“We see good potential in the copper segment with rising incomes and higher demand for consumer products and services requiring copper,” Ms Scotland, chief executive of Blumont Copper, said. She is the founder and former managing director of Australian mining company Citadel Resource Group.
“We continue to look for strategic partnerships that will give us a global footprint into the copper resource space,” she added.
Discovery, which owns the Boseto copper mine in Botswana, was the subject of a takeover bid by Cathay Fortune, the Chinese private equity group controlled by billionaire Yu Yong.
The project is within the Kalahari copper belt region, which has attracted billions of dollars in takeovers in the past two years.
Discovery will use the total proceeds to repay its revolving facility, project finance debt and fees due under the transaction, Blumont said.
The balance will be used for development and exploration, as well as for working capital purposes. Discovery has fallen 93 per cent in Sydney trading this year.
Since December last year, Blumont has pursued acquisition opportunities in the mineral and energy resources industry. Discovery is the group’s second investment in the copper sector.
The first was made last month when it took a 10.7 per cent stake in the enlarged share capital of Australian-listed Kidman Resources, a company focused on the exploration and development of copper-gold deposits within Australia.
Blumont also announced yesterday that it has acquired 14 million new shares in the third tranche of share subscription in Cokal Limited.
The company entered into a conditional agreement two months ago to buy a 12.75 per cent stake in Cokal’s enlarged capital. Cokal, also listed in Australia, focuses on high-margin metallurgical coal and has interests in coal exploration tenements in Kalimantan, Indonesia and Tanzania.
For the fiscal second quarter, Blumont posted a revenue of S$714,000 and a loss attributable to equity-holders of S$22.4 million.
Blumont shares fell 42.5 cents to S$1.945 yesterday as it traded ex-rights. The stock has risen more than 850 per cent in price since the beginning of this year, Bloomberg data showed.