Sir John Craven,
Chairman,
Lonmin
 
London, England — MININGREVIEW.COM — 15 August 2008 – Lonmin plc – the world’s third largest platinum producer – has again come out strongly against the US$10 billion (R75 billion) takeover bid by international miner Xstrata plc, and has warned shareholders against considering the offer by the Swiss-based company.
 
A Lonmin news release issue here described Xstrata’s pre-conditional offer as “an attempt to acquire Lonmin’s assets at a price that does not reflect fair value for Lonmin shareholders.”

Lonmin chairman Sir John Craven commented: “Mining companies should be valued on their long-term fundamentals. Xstrata has admitted that it has long coveted Lonmin’s long-life, high-quality, low-cost assets,” he added, “and this opportunistic proposal is an attempt to acquire Lonmin’s assets cheaply and to capitalise on the expected improvement in our mining and processing performance. It comes immediately following the recent decline in the platinum price and the offer – if and when made – represents no more than the price Lonmin shares traded at as recently as six weeks ago,” Sir John pointed out.

“This pre-conditional offer fails to recognise our growth potential, given both the ounces we have in the ground and the long-term demand for PGMs in the future,” he added. “It is not in the interests of our shareholders and the board will continue to oppose it vigorously. Shareholders are urged to take no action in respect of the approach by Xstrata and are strongly advised to reject the offer,” he insisted.

Lonmin’s latest release underlined the following factors in favour of a rejection of the Xstrata offer:

  • Lonmin has a total mine life in excess of 100 years with 156.3 million PGM ounces in reserves and resources;
  • The company is the lowest-cost integrated producer of PGMs in the Bushveld complex;
  • It is one of only three integrated mine-to-market PGM businesses, and benefits from an integrated business model with sophisticated downstream processing technology;
  • It has a new and experienced Lonmin operational management team in place and improving performance;
  • The company will benefit from its recent investment in mechanisation; and
  • Lonmin has outstanding growth prospects, both in the shorter-term from a recovery in production from 2008’s low point, and in the longer-term from exploiting the full potential of Marikana and the development of its Akanani and Limpopo projects.