Discovery Metals Limited is evaluating Chinese equity firm, Cathay Fortune Corporation and China and Africa Development Fund’s USD 850 million all share offer for the Botswana focused base metals producer.

The Australian Stock Exchange listed copper and silver producer said that the board is currently evaluating the offer in the indicative proposal. However it has cautioned shareholders on uncertainty whether an agreement would be reached on the terms proposed or at all or that a transaction will result from the indicative proposal. The board will update the market following consideration of the indicative proposal and its terms.

Cathay Fortune based in Shanghai and owned by Chinese billionaire Mr Yong Yu made an USD 1.74 per share cash offer for stock in Discovery that it does not already own. The offer price represents 56% premium to the volume weighted average price of Discovery stock for the 20 day period ending September 21 when the written offer was submitted and 51% over the volume weighted average price for the previous 30 days.

Mr Zhang Zhenhao director and CFO of CFC said that “Cathay Fortune Corp and CFC have a strong interest to acquire all of the outstanding shares of Discovery Metals Limited through a joint venture that would be 75 percent owned by CFC, and 25 percent by CAD. If the transaction sails through, it would land the Chinese investors Discovery’s Boseto copper and silver project in Botswana which started production in July targeting 36 000 tonnes per year of copper and 1.1 million ounces of silver yearly.”

Source - Southern Times Africa.com

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