Shares in platinum producer Lonmin (LNMIF-O, LMI-L) ended 197 pence, or around 8%, lower at 2,300 pence in London, after the company said that “preliminary discussions” with a potential buyer had ended.
South Africa’s Gold Fields (GFI-N, GFI-J) and Swiss-based Xstrata (XSRAF-O, XTA-L) had been widely touted as the unidentified shoppers.
Earlier this year, Lonmin’s plan to acquire the 8.5% stake it does not already own in fellow platinum miner Messina was okayed by 88.1% of the latter’s minority shareholders voting at the Messina scheme meeting.
In mid-November Lonmin boosted its offer to Messina’s minority shareholders from 33 rand per share to 45 rand per share. The plans still needs to be sanctioned by the High Court of South Africa.
Lonmin picked up a 91.5% stake in Messina last summer via its acquisition of Southern Platinum. Messina’s key asset is the Messina platinum-group-metal mine on the northern portion of the Eastern limb of the Bushveld complex, in South Africa’s Limpopo province. Lonmin has since renamed the mine Lonmin Platinum Limpopo.
Lonmin Platinum Limpopo (Messina) currently produces around 45,000 oz. of platinum per year from a strike length of just 4 km. Lonmin plans to boost production to 75,000 oz. annually by 2007.
Lonmin is the world’s third-largest primary platinum producer.
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