Under the terms of the agreement, shareholders of Hana will receive 82 cents in cash for each common share of Hana held, representing a premium of approximately 88 percent to the 20-day volume weighted average price of the Hana shares on the TSX Venture Exchange as of October 23, 2012.
Hana is developing the Ghanzi copper-silver project in which Cupric currently owns about 18.6 percent of the issued and outstanding shares of Hana.Cupric's move follows the recent hostile acquisition bid of Discovery Metals by a Chinese private equity firm owned by billionaire Yong Yu. While Discovery, which commissioned its Boseto mine in Maun early this year, is resisting a P6.5 billion takeover overture by the Chinese due to a 'low bid price', Hana has readily accepted the offer from Cupric.
With listings on the Toronto and Botswana stock markets, Hana Mining is poised to become the second copper and silver miner in the Kalahari copperbelt, after Discovery Metals.In a statement, Cupric Canyon Capital announced that it has offered Hana Mining a P530 million(C$67 million) takeover offer for the 81.4 percent or so shares in Hana it does not already own. For its P530 million, Cupric is chiefly getting Hana's flagship Ghanzi copper project. In a May scoping study, Hana reported capital costs of P3.2 billion ($399 million) for a copper project that could produce 66 million pounds copper and 878,000 ounces silver annually on average over a 12-year mine life from a 10,000-tonne-per-day operation at cash costs of P16 ($1.96) per pound copper.
According to Reuters, the southern African copperbelt has seen more than P79 billion ($10 billion) in copper mine takeovers in the past two years. The 800-kilometre long Kalahari Copperbelt stretches from central Namibia into northwestern Botswana. It contains some of southern Africa's richest copper deposits. Apart from Discovery and Hana, other companies that are exploring Africa's newest copper and silver mining province, include Mod Resources and New Hana Copper Mining.
Hana Mining has been exploring in Botswana since 2007 and currently controls five prospecting licences covering 2,169 square kilometres situated south of Maun. The previous explorers in the area were Anglo American, Gencor (now BHP Billiton), Anglovaal, Newmont, DeBeers, US Steel Corporation and Delta Gold. The Banana Zone is the current focus in the Ghanzi property where Hana is reviewing the open-pit and underground potential of the resource.
Between 2012 and 2013, Hana will focus on Phase Three of the scoping project, which involves a bankable feasibility study, non-recourse financing, attainment of mining licences and water rights and establishment of infrastructure. The last phase involves the engagement of an engineering, procurement, construction and management contractor, pre-mine development and mine construction. Commercial production is planned to start in 2015, allowing Hana to join the adjacent Discovery Metals as Botswana's only copper and silver producers.