Boseto Mine bid reaches competition watchdog

Staff Writer | Wednesday June 3, 2015 14:36

In a statement, the CA said it has received a merger notification for the proposed acquisition and was thus inviting stakeholders’ submission on the bid.

Australian mining company, Discovery Metals is the owner of the Boseto Mine.

Cupric Canyon owns the Khoemacau Copper Mining, which operates in the north-western part of Botswana and has been focusing on the advancement of the Zone 5 and Banana Zone copper deposits.

“According to the Competition Act, any person including a third party may voluntarily submit to the inspector or the Authority any document, affidavit, statement or other relevant information in respect of a proposed merger. “The Competition Authority therefore seeks any stakeholder views for or against the proposed merger,” reads the statement.

Discovery was placed under provisional liquidation after failing to meet its financial obligations amounting to over $149 million (P1.49 billion) to various creditors.

Officials of Deloitte Botswana, the liquidators of Discovery Metals Limited (DML) Boseto copper mining, recently told Mmegi Business that a meeting would be held this month where creditors will decide on the bid for the mine by Cupric Canyon.

If the bid were to be accepted, it would mean creditors receiving as little as 20 cents for every dollar they are owed by Discovery.  Director of tax services at Deloitte, Terry Brick said creditors would hold a meeting on June 12, 2015.

“If the offer is accepted then the creditors will be paid their share and Cupric will own the mine, the mine plant and machinery.  Cupric is offering US$31 million excluding the mobile fleet being the dump trucks and large mobile machines,” he said.

The $149 million total liabilities are made up of $115 million owing to banks and $34 million to other creditors.

According to Brick, if the offer were rejected they would have to look for other interested parties.  He, however, said the process could drag on at this stage because at the present time the international price of copper is low and is expected to stay that way for a few more years.