consmin takeover bid looming, page-4

Rival ConsMin bid could be brewing: Numis

Paul Garvey
Sunday, 25 March 2007

CONSOLIDATED Minerals' long-time trading ally Noble Metals may be considering a rival bid for the diversified miner, according to Numis Securities analyst John Meyer.



Last Friday, Noble's representative on the ConsMin board, Richard Elman, tendered his resignation from the board with immediate effect.

While ConsMin said the resignation was "due to increasing demands associated with his position as chief executive officer of Hong Kong-based Noble Group", Meyer said a potential bid from Noble for ConsMin could have been behind the resignation.

"Noble Metals might look to make a rival offer for Consolidated Minerals and this could be the reason for Elman's resignation," Meyer said in a note released over the weekend.

Noble has handled the trading of ConsMin's products into Asia for several years, and is ConsMin's largest individual shareholder with a 5.52% interest.

However, Elman was a member of the ConsMin board that said it had unanimously recommended the current takeover bid – in the absence of a better offer – launched by a private equity syndicate headed by former BHP Billiton chief Brian Gilbertson.

Gilbertson's Russian-backed group Pallinghurst Resources, together with private coal miner AMCI, are offering $1.38 cash per share plus two shares in the new ConsMin for every five currently held, in a bid that values the company at $2.28/share.

ConsMin operates the Woodie Woodie manganese mine, the Beta-Hunt nickel complex, plus the Coobina chromite project, all in Western Australia.

Numis also pointed to a newsletter report about recent improvements in the manganese price – in which manganese prices are reported to have increased 25% so far this year – as further supporting a higher price for ConsMin.

"It looks as if the prices published in the Metal Bulletin are some way behind what is being realised in China," Meyer said.

"If manganese and chromite prices in China are so far ahead of the UK-published Metal Bulletin prices, then Consolidated Minerals might look far better value than we have been able to calculate on previous market information."

Numis had up until recently been ConsMin's long-serving broker and advisor into London, but the group stood down from those posts shortly after the Pallinghurst offer was announced.