Wednesday, August 10, 2022

Discovery Metals rejects Cathay Fortune Corporation’s P6.6 billion takeover bid

Discovery Metals has told its Chinese suitor to dig deep into its pocket if it wants to acquire the company that owns Boseto Copper project near Maun.

DML this week disappointed Cathay Fortune Corporation (CFC) at a meeting of the two as it told the Chinese private equity firm the US$ 850 million bid is not the true value of the Botswana Stock Exchange (BSE) quoted Australian company.

The company said it met with representatives and advisers from Cathay Fortune Corporation and China-Africa Development Fund (CAD Fund) to discuss the unsolicited, indicative, non-binding proposal to acquire all the shares (not currently held by CFC) in Discovery Metals.

Discovery Metals said its directors have considered the Indicative Proposal and its terms and have taken advice from the company’s financial advisers, UBS.

“The Directors have advised the representatives of CFC and CAD Fund that the price proposed by CFC and CAD Fund is inadequate and does not reflect, in the context of a change of control, the value of the Company’s operations and expansion plans, the potential to increase the resources on the Company’s tenements through further exploration, the strategic value of the Company with an operating project and management team in Botswana, and the scarcity value of the Company,” Discovery Metals said in an update.

“The Directors have advised the representatives of CFC and CAD Fund that if they wish to put a new proposal to the Board, the Board will consider and assess that new proposal on its merits.”
Discovery Metals has been studying an unsolicited US $850 million bid from CFC, owned by Chinese billionaire, Yu Yong and CAD Fund, to acquire all the shares (not currently held by the bidder) in Discovery.

CFC, which owns 13.7 percent of Discovery’s ordinary shares, wants to acquire all the shares (not currently held by the bidder) in Discovery for A$1.70 per share.

The move would see the Chinese private equity firm having access to the Kalahari Copperbelt in Botswana to secure China’s rising appetite for raw materials and bolster acquisitions in Africa.
Discovery Metals is an ASX/BSE listed copper exploration and production company focused on the emerging Kalahari Copperbelt in north-west Botswana.

The company is a copper producer at its 100 percent owned Boseto Copper Project and has prospecting licences covering 11,872 km2 along the Kalahari Copperbelt.

The Kalahari Copperbelt sediment-hosted mineralisation of the Boseto copper project is similar in style to the well-known and large deposits of the Central African Copperbelt of Zambia and the Democratic Republic of the Congo. Discovery has advised shareholders that there is no need to take any action in respect to the Indicative Proposal.

On Thursday, DML reported a maiden Mineral Resources estimate at the Ophion Deposit, which is located approximately 35 kilometres from Boseto at the edge of the Boseto Zone and continues into the Mid Kalahari Zone. It extends over a strike length of approximately 5.5 kilometres.

The Maiden Ophion Inferred Mineral Resources of 14 Mt @ 1.0 percent Cu and 12.0 g/t Ag was discovered at this prospect and Discovery CEO, Brad Sampson, said: “Situated at the edge of the Boseto Zone, Ophion has the potential to contribute to either an expanded, longer life Boseto Copper Project, or to form part of a new standalone project in the Kalahari Copperbelt.”

At the close of trading on the BSE, Discovery Metals gained 14.1 percent to close at a new 52-week high of 1,323 thebe following news that a Chinese firm had tabled a non binding offer to acquire the company’s high grade copper assets in Botswana.

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