1st May 2008 07:00
Eurasian Natural Resources Corp Plc01 May 2008 1 May 2008 Eurasian Natural Resources Corporation PLC Completion of the acquisition of 50% of Bahia Mineracao Limitada ('BML') for US$300 million London - Eurasian Natural Resources Corporation PLC ('ENRC' or, together withits subsidiaries, the 'Group'), the holding company of a leading diversifiednatural resources group with integrated mining, processing, energy andlogistical operations based in Kazakhstan, today announces the exercise of anoption to acquire a 50% interest in Bahia Mineracao Limitada ('BML'). The 50%interest in BML is being acquired from Zamin BM NV ('Zamin') for a cashconsideration of US$300 million. BML is a Brazilian company focused on the development of an iron ore deposit inthe Bahia State of Brazil. ENRC believes that BML has a high-quality asset base.As part of an ongoing pre-feasibility study, SRK Consulting have produced aMineral Resource Statement which reports, according to JORC guidelines, 470million tonnes of combined Measured and Indicated Mineral Resource at 39% ironcontent and an additional 1,490 million tonnes of Inferred Mineral Resource at30% iron content. BML's management team has extensive experience of developing similar resources.Good progress has already been made in developing an infrastructure plan and BMLhas engaged the support of key contractors, including SRK Consulting andConstrucoes e Comercio Camargo Correa S/A, to develop the project. ENRC is confident that the iron ore market continues to offer attractiveopportunities, particularly in view of the recent growth in the price of andrelative demand for iron ore. ENRC believes that the acquisition of this stakewill further enhance ENRC's position in the iron ore market; ENRC's Iron OreDivision produces 17 million tonnes of iron ore concentrate annually. Commenting on the acquisition Dr. Johannes Sittard, Chief Executive Officer ofENRC, said, "We are excited by the prospects and the fundamentals of the ironore industry. With this outlook we particularly welcome the opportunity toacquire an interest in BML. At full output this project could support anoperation producing in excess of 20 million tonnes of concentrate per annum. Weare confident that in time the acquisition will enhance shareholder value." Armando Santos, Chief Executive Officer of BML, said, "In addition to the veryfavourable market conditions supporting the development of this project, we aredelighted by the strong governmental support to BML in the State of Bahia,including the environmental authorities, which we expect to facilitate theimplementation programme." Credit Suisse Securities (Europe) acted as sole financial advisor to ENRC forthis acquisition. - ENDS - For further information, please contact:ENRCMounissa Chodieva +44 (0) 20 7389 1879James S Johnson +44 (0) 20 7389 1862 M: CommunicationsHugh Morrison +44 (0) 20 7153 1534Edward Orlebar +44 (0) 20 7153 1523Julia Kalcheva +44 (0) 20 7153 1517 Credit Suisse Securities (Europe) Limited +44 (0) 20 7888 8888Jeff Couch About ENRC ENRC is the holding company of a leading diversified natural resources groupwith integrated mining, processing, energy, logistical, and marketingoperations. ENRC is the world's largest producer of ferrochrome, based on chromecontent, the world's sixth largest iron ore exporter by volume and world's fifthlargest supplier of traded alumina by volume (CRU and Heinz H. Pariser, 2006data). The Group's revenue was US$4,106 million for the year ended 31 December2007 and EBITDA before exceptional items was US$1,906 million. For furtherinformation please see the Group's website at www.enrc.com. About ENRC's Iron Ore Division ENRC's Iron Ore Division produces and sells iron ore concentrate and pelletsprimarily to steel producers. The Division's operations include iron ore mines,crushing, beneficiation and pelletising plants and a thermal power station.According to CRU estimates (based on 2006 data), a leading independent alloy andmetals consultancy, the Iron Ore Division operates the largest iron ore miningand processing enterprise in Kazakhstan and is the sixth largest iron oreexporter in the world and in the lowest third of the cost curve for global ironore pellet production. For the year ended 31 December 2007 the Iron Ore Division had total third partyrevenue of US$991 million, which represented 24% of the Group's consolidatedrevenue. As at 31 December 2007, iron ore reserves of the Iron Ore Division were1,485 million tonnes and the measured, indicated and inferred resources were4,518 million tonnes. About Bahia Mineracao Limitada ('BML') BML was established in 2005 and owns the rights to conduct geological researchstudies in over 80 areas in the Caetite region of Bahia in Brazil. As part of anongoing pre-feasibility study, SRK Consulting have produced a Mineral ResourceStatement which reports, according to JORC guidelines, 470 million tonnes ofcombined Measured and Indicated Mineral Resource at 39% iron content and anadditional 1,490 million tonnes of Inferred Mineral Resource at 30% ironcontent. There have been no profits attributable to the project to date. BML's management team includes: Mr. Armando Santos, Chief Executive Officer; Mr.Clovis Torres, Executive Vice-President; Ms. Christine Soares, MarketingDirector; Ms. Raquel Lavor, Assets Director; Mr. Antonio Claret, MiningDirector; and Mr. Mauricio Drumond, Project General Manager. Forward looking statement This announcement includes forward-looking statements that reflect the currentviews of the management of the Group with respect to future events. Theseforward-looking statements include matters that are not historical facts or arestatements regarding the Group's intentions, beliefs or current expectationsconcerning, among other things, the Group's results of operations, financialcondition, liquidity, prospects, growth, strategies, and the industries in whichthe Group operates. Forward-looking statements are based on current plans,estimates and projections, and therefore too much reliance should not be placedupon them. Such statements are subject to risks and uncertainties, most of whichare difficult to predict and generally beyond the Group's control. The Groupcautions you that forward-looking statements are not guarantees of futureperformance and that if risks and uncertainties materialise, or if theassumptions underlying any of these statements prove incorrect, the Group'sactual results of operations, financial condition and liquidity and thedevelopment of the industry in which the Group operates may materially differfrom those made in, or suggested by, the forward-looking statements contained inthis announcement. In addition, even if the Group's results of operations,financial condition and liquidity and the development of the industry in whichthe Group operates are consistent with the forward-looking statements containedin this announcement, those results or developments may not be indicative ofresults or developments in future periods. The Group does not undertake anyobligation to review or confirm analysts, expectations or estimates or torelease publicly any revisions to any forward-looking statements to reflectevents that occur or circumstances that arise after the date of thisannouncement. Credit Suisse Securities (Europe) Limited statement Credit Suisse Securities (Europe) Limited ('Credit Suisse'), which is authorisedand regulated in the United Kingdom by the Financial Services Authority, isacting as financial adviser to ENRC and is acting for no-one else in connectionwith the acquisition, and will not be responsible to anyone other than ENRC forproviding the protections afforded to customers of Credit Suisse nor forproviding advice to any other person in relation to the acquisition. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ENRC.L