Troilus Gold advances project financing with additional LOIs for $500m
In May, the company produced a feasibility study that demonstrated the potential for Troilus to be amongst the largest gold producers in Canada.
The Telegraph reports Anglo American CEO Cynthia Carroll took a last-minute flight to Santiago on Thursday to calm tempers over the sale of a 24.5% stake to Mitsubishi Corporation but neither Chile’s president Sebastian Pinera, finance minister Felipe Larrain or mining minister Hernan de Solminihac would see her.
She is understood to have contacted all three before announcing the $5.39 billion deal that undermines state-owned copper giant Codelco’s plan to exercise the 33-year old option to buy half of Anglo’s Sur copper complex that includes the newly expanded $2.8 billion Los Bronces mine. The Mitsubishi transaction values Anglo Sur at $22 billion and Anglo’s stock is up 4.8% from its Wednesday close ahead of the deal. Codelco was offering $6 billion for 50%.
The Telegraph reports Anglo is now facing a legal assault from Codelco, which has hired New York litigation specialists Cleary Gottlieb as well as three of Chile’s top legal firms and financial advisor Rothschild in anticipation of launching a legal case.
“We’re not going to sell 49 percent of Anglo Sur to Codelco,” Chief Executive Cynthia Carroll said in an interview published in El Mercurio newspaper on Friday and reported by Reuters. “One can want many things, but contracts allow for other things.” Over and above the lowball offer from Codelco, what must have really galled Anglo is that they would have had to pay around $1 billion in taxes on the transaction.
FT reports Carroll would have to employ all her diplomatic nous over the coming months and quotes the president of Codelco’s board: “You can be sure we take any necessary action to safeguard Codelco’s rights and thus the rights of all Chileans.”
Proactive Investor reports both Deutsche Bank and RBC repeated their bullish recommendations for the stock on Friday, while Deutsche decided to increase its target price because of the Mitsubishi deal. The expansion of the sought-after Los Bronces mine should increase Anglo’s annual copper output by more than 10%.
9 Comments
Stacy Hope
24.5% for $5.39 Billion as opposed to 50% for $6 Billion…need we say anymore? However, I wonder what this will hold for future relations with Chile and Anglo
Digby Knight
I recall that, when Val Duncan of RTZ (Rio Tinto) landed in PNG’s Port Moresby, in the 70s, thinking he could renegotiate the Bougainville copper agreement, prime mininster Michael Somare sent a message to the airport, saying he was too busy playing gold. (and the rest, one might say, is sorry history)
Digby
whoops – I meant playing “golf”- not “gold” – a freudian slip
Franciscus Baars
“National pride”, “the rights of all Chileans” – what kind of rhetoric is that? Will we hear talk of nationalisation next? In a market economy, which Chile chose many decades ago, it’s shareholder business that counts. If copper is of national strategic interest to the country, which is fine, then Codelco should be able to exercise its option by upping the ante on Mistubishi’s offer and strategically dropping the taxes. There’d be plenty of minng years left to make back the profit. “National pride” in the Chilean minng industry would be seeing it functioning on a global market competitively, efficiently and good governance of community and environment.
Xyzmining
The Anglo management should buy (and read) a history book that explains what happened in Chile in the 1970’s. Remember Allende?
Karl Wolzak
Xyzmining
Yes, lest not forget what happened to Chile when the last government tried this.
The CIA moved in and there was mass murder everywhere, hope Anglo doesn’t do business this way.
Second Orion
That’s the problem with investing in countries which control their wealth. They may not honor your investment, but instead steal it. This, unfortunately, is turning into a classic theft by government. The governments make the laws to be anything they want to get what they want. Makes their leadership look good to their people, even though, in this case it will be theft. No amount of attorneys that could be hired, could stop it. -Best to raise as much noise as possible – and plan to move elsewhere.
Cris
Chile and Codelco are just getting in it’s sovereign right to defend what is Chilean and Chilean’s Property. HIS COPPER and resources. if they don’t make the rules and stand on it, then the multinationals (no more than thieves) will do whatever they want.
Chile is hitting the table. If you don’t like the rules, then get out.
AR
That just says that financial analysts are complete idiots, Carrol is absolutely crazy and will lose this demand.