Johannesburg, South Africa — MININGREVIEW.COM — 17 December 2008 – South African diversified mining group African Rainbow Minerals (ARM) and South African-based Teal Exploration and Mining have agreed that ARM purchase all outstanding shares in Teal that it does not own.
The announcement here to this effect went on to say that ARM would form a 50-50 joint venture with Brazilian miner Companhia Vale do Rio Doce (VALE) Vale for the future development and operations of Teal’s assets. Teal said the acquisition cash price would be C$3 per share – funded through an equity investment by Vale into Teal’s operations – first by buying the 35% minority stake, and then a 15% stake from ARM.
“These assets include exploration and development programmes for copper and cobalt in Zambia and the Democratic Republic of Congo, as well as a gold exploration programme in Namibia,” the statement continued. Teal said it expected to complete the deal before March 31, 2009.
ARM said Teal would then be delisted from the Toronto and Johannesburg Stock Exchanges, as its share price performance did not allow for raising capital as initially hoped.
The inability to raise equity capital has been further hit by the credit crunch, forcing ARM to provide ongoing financial support to Teal, disproportionate to its level of shareholding.
But ARM said it remains confident about Teal’s role in its future operations.
"Teal remains key to ARM’s long term diversification plans, being ARM’s chosen vehicle for the expansion of its copper interests in Africa," it said.
ARM has publicly stated that it intends to position itself as a partner of choice for mining in Africa, as demonstrated by its partnerships with world class mining companies. A JV partnership with Vale in respect of Teal would ensure that risk exposure, capital allocation, funding and copper mining expertise would be optimised for the development of a successful copper business in Africa.