HONG KONG – Anvil Mining Ltd. (TSX:AVM) said Monday there’s no assurance that a $1.3-billion deal for it to be acquired by a Chinese company will go ahead, despite an offer by purchaser Minmetals Resources Ltd. to extend the deal again until mid-February.
Anvil and Minmetals Resources Ltd. have been in discussions since last fall with stakeholders in the Democratic Republic of Congo, including the state-owned mining company Gecamines, which needs to give its approval to the takeover.
“There can be no assurance that the parties will reach agreement on the terms of revised commercial arrangements with Gecamines,” Anvil said in a news release Monday.
In addition, the Australian mining company – which is listed in Canada – said there’s no guarantee that any agreement would be satisfactory to MMG Malachite Ltd. a wholly owned indirect subsidiary of Chinese-based Minmetals.
“Consequently, there can be no assurance that MMR (Minmentals) will consummate the offer,” Anvil said.
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Minmetals has extended the offer to buy the common shares at $8 per cash in share of Anvil to Feb. 16, the fourth time the offer has been extended since it was announced at the end of last September.
“The extension will provide additional time for the conditions of the offer to be satisfied,” MMG Malachite Ltd. said.
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Anvil said both it and Minmentals were advised that if the takeover is completed without Gecamines’ approval, that Anvil’s local subsidiaries in the Democratic Republic of Congo would be in breach of the terms of the lease for the Kinsevere project and a joint venture agreement for another project in the DRC.
China-based Minmetals earlier received Australian government approval for its takeover of Anvil, which has an office in Montreal and lists its shares on the Toronto Stock Exchange.
Hong Kong-listed Minmetals Resources is majority owned by China Minmetals Nonferrous Co., Ltd., part of the China Minmetals group.
The deal is part of a Chinese drive to use rich cash reserves to acquire mining and resources companies around the world, including in Canada.
For Minmetals, the pending Anvil agreement comes after failure to finalize other planned Canadian acquisitions.
Earlier this year, Minmetals lost out to Barrick Gold Corp. (TSX:ABX), which outbid the Chinese company for copper producer Equinox Resources.
Shares in Anvil were down 15 cents, or two per cent, to $7.32 in morning trading on the Toronto Stock Exchange.
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