In recent months, Metall Mining (TSE) has been re-evaluating its key holdings in light of a possible sale of its shares by parent company Metallgesellschaft (MG). And while an announcement on the sale is not expected until early June, speculation is rife that MG will sell the 40.7 million shares that represent a 50.1% interest in Metall.
Over the past two quarters, Metall has concluded several transactions to consolidate its holdings. It bought an additional 12.5% interest in the ordinary shares and an additional 8.7% interest in preference shares of OK Tedi Mining for US$43 million. Having received regulatory approval, Metall now owns 17.4% of the preference shares and 18% of the ordinary shares. Other previous transactions include the purchase of a 35% interest in a German smelter, Norddeutsche Affinerie AG, and the sale of 8.5 million shares of MIM Holdings. Metall raised $3.7 million through the sale of the MIM shares.
In its most recent manoeuvre, Metall has agreed in principal to increase its holding in RFC Resource (TSE) to 58.2% from 46.8%. The 2.7 million shares will be purchased for gross proceeds of $5.5 million.
Last month, RFC completed a feasibility study at its Pend Oreille zinc-lead property in Washington state. Minable reserves there are 3.5 million tonnes grading 9.1% zinc and 1.3% lead.
RFC will use the proceeds to extend a drill drift beyond the defined northeast zone of the mineralization to prove up drill-inferred reserves. These events had a positive impact on Metall’s first-quarter earnings as the company posted a net income of $5.7 million on revenues of $207.4 million, compared with $2.8 million on revenues of $72.5 million in the same period last year.
Other key developments in the quarter include:
* startup of Metall’s 45%-owned Bougrine zinc-lead mine in Tunisia; * surface construction at the 49%-owned Cayeli copper-zinc project in Turkey; and
* completion of the feasibility study at the Troilus gold project in northern Quebec, confirming a minable reserve of 49.2 million tonnes averaging 1.34 grams gold per tonne and 0.11% copper.
Metall also operates the Winston Lake zinc-copper mine near Schreiber, Ont., and holds an 87.3% equity interest in Michigan-based Copper Range.
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