Zambia approved Barrick Gold Corp. (ABX)’s purchase of the Lumwana copper mine as part of a C$7.3 billion ($7.5 billion) takeover of Equinox Minerals Ltd. (EQN), the southern African nation’s antitrust body said.
Barrick, the world’s largest producer of the metal, must let the Zambia Consolidated Copper Mines Investment Holdings keep its 2.2 percent stake in Equinox as a condition of the approval for the deal, the Zambian Competition Commission said in an e-mailed statement today. It must also honor Lumwana’s existing agreements with a local smelter and suppliers, while limiting job losses, the commission said.
“The Board granted final conditional authorization on the premise that the acquisition did not raise any competition concerns because Barrick Gold Corp. (ABX) had no known presence in Zambia and, therefore, unlikely to lead to a situation that could substantially lessen competition in the mining sector,” it said.
This press release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or an invitation to sell, any of the securities of Equinox. Such an offer is only made pursuant to the Offer and take-over bid circular, the letter of transmittal, the notice of guaranteed delivery and other related offer materials which the Offeror has filed with the Canadian securities regulatory authorities and mailed to holders of Equinox Shares. The Offer is not being made to, nor will deposits be accepted from or on behalf of, Equinox shareholders in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. Furthermore, the information contained in this press release does not constitute financial product advice. It has been prepared without reference to the investment objectives, financial situation, taxation situation and particular needs of any individual Equinox shareholder. Equinox shareholders should consider consulting with their investment, financial, taxation or other professional advisor before taking any action in relation to their investment in Equinox.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information contained in this press release, including any information as to our strategy, projects, plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements". All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "will", "anticipate", "contemplate", "target", "plan", "continue", "budget", "may", "intend", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Barrick to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: changes in the worldwide price of gold, copper or certain other commodities (such as fuel and electricity); inaccuracies or material omissions in Equinox's publicly available information or the failure by Equinox to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information; the ability of the Company to complete or successfully integrate an announced acquisition proposal; legislative, political or economic developments in the United States, Canada, Zambia, Saudi Arabia or elsewhere; operating or technical difficulties in connection with mining or development activities; availability and costs associated with mining inputs and labor; the risks involved in the exploration, development and mining business. Certain of these factors are discussed in greater detail in the Company's most recent Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.
The board granted final conditional authorisation on the premise that the acquisition did not raise any competition concerns because Barrick Gold Corporation had no known presence in Zambia and therefore unlikely to lead to a situation that could substantially lessen competition in the mining sector,” said Lingela.
“The Commission has placed a condition on ensuring good environmental practices, and since Lumwana Mine may in future extract uranium, there is also a condition that would protect people and the area from potential radioactive hazards that uranium poses.”
He further said the transaction had been granted on condition that Barrick Gold Corporation does not acquire 2.2 per cent shares in Equinox that Zambia Consolidated Copper Mines – Investment Holdings (ZCCM-IH) holds.
Equinox Minerals Limited is an international mining and exploration company that owns Lumwana Copper Mine, 65 kilometres west of Solwezi.
Barrick Gold Corporation is a Canada-based company which is the world’s leading gold mining company in terms of production, reserves, and market capitalisation and operates gold and copper mines in Canada, United States of America, the Dominican Republic, Australia, Papua New Guinea, Peru, Chile, Argentina, Pakistan and Tanzania.
According to statistics, the Lumwana Mining project currently accounts for approximately 19 per cent of Zambia’s total copper concentrate production. Further, Zambia is estimated to possess 16 per cent of the world’s known copper reserves and currently only contributes about 6 per cent to 7 per cent of the global copper production.