malawi

Does anyone find the acquisition of the RE deposit in that well known, land locked, African nation of Malawi announced in September 2007 a little unusual?

LYC have a resource at Mt Weld of 12.2M tonnes at 9.7% REO – or thereabouts – which will last the project a long, long time – assuming they even get started. They have a lot more than that within the greater Mt Weld ore body. Why would LYC then pay $4M for a resource in Malawi with an inferred resource of 107,000 tonnes of REO at an average grade of 4.24% REO?

Whilst the inferred resource is said to be open at depth, the relative valuation of the acquisition values the Mt Weld REO deposit at ~ US$1Bn. I note from the Annual Report that they plan to finalise the acquisition in the second half of 08/09 – but why bother – and why pay cash?

Should one query why Directors might be sending cash overseas for an asset that does not seem to make a lot of sense within their portfolio, and which really does not seem to have had any work done on it since the announcement?
The vendors of the asset are, interestingly, a private Malawian company. It would be useful to have more information about that company.