25 pcent of tenke sold at usd1.8b

Ludlin Mining has just announced a friendly purchase of Tenke Mining for US$1.34 Billion (A$1.6Billion). Tenke owns 24.75% of the Tenke Copper Cobalt deposit in the Congo (not that far from AGY's Mousangati). The operator is Phelps Dodge (BHP dropped out some years ago). The deposit contains 235,000,000 tonnes of cu at 3.01% copper and .31% cobalt.

The history of Tenke is a mirror image of what is happening at AGY. They bought Tenke in the late 1990's and it had also been drilled out just like Mousangati and was thereafter subjected to bouts of force majure as civil war raged. Recently terms for development were renegoitated and Phelps Dodge recently completed a detailed feasibility study which is available on the Tenke Mining website.

The deposit is 235,104,000 tonnes @ 3.01% copper and .31% cobalt. Tenke negotiated JV terms with BHP who transfered to Phelps Dodge at the time of very low coppor prices. Terms were Tenke 24.75%, Phelps Dodge 57.75% and Congo Government 17.5%. We can assume that AGY may be able to get similar or slightly better terms because of much higher commodity prices, say a guesstimate of around 25%.

Both Tenke and Mousangati are drilled but not yet developed. Tenke is a little more advanced as the majority partner has completed a new feasibility study.

Tenke has a per tonne resource value at current prices of US$252.23 whereas Mousangati is around US$650.00 per tonne. Tenke contains 7,073,000 tonnes of copper worth US$54.5 Billion v Mousangati's 2,400,000 tonnes of nickel worth US$115 Billion plus cobalt and PGM credits plus massive exploration upside. IF Tenke's 24.75% interest is worth US$1.34 Billion then maybe AGY's "potential" 25% interest is worth double or around US$2.68 Billion / A$29.24 a share. The number is simply staggering.