Antofagasta Regulatory News (ANTO)

15 Aug 2006 07:53

Antofagasta PLC15 August 2006 ANTOFAGASTA PLC Antofagasta announces A$11.20 per share cash offer for Equatorial Mining Limited LONDON: 15 August 2006 - Antofagasta PLC ("Antofagasta") is pleased to announceit has entered into an agreement to acquire a 19.99 per cent. shareholding inEquatorial Mining Limited ("Equatorial") and has made a cash takeover offer ofA$11.20 per share for all of the issued shares of Equatorial ("the Offer"). Equatorial is listed on the Australian Stock Exchange and majority owned by AMPLife Limited ("AMP"), a major Australian financial institution. Equatorial'sprincipal asset is its 39 per cent. ownership interest in the El Tesoro coppermine in Region II of Chile. Antofagasta owns the remaining 61 per cent.interest in El Tesoro and has operated and managed the mine since developmentbegan in 1999. The acquisition of Equatorial would provide Antofagasta withfull ownership of El Tesoro and will consolidate its land position in the SierraGorda district, where its other interests include the Esperanza project. The Offer represents an attractive price to the shareholders of Equatorial andan opportunity for them to exit an illiquid investment with cash consideration.Antofagasta's cash takeover offer is more than 20% higher than the offerannounced by Quadra Mining Ltd ("Quadra") on 20 July 2006 and has considerablyfewer conditions. The Offer represents a premium of: • 21 per cent. to Quadra's offer of A$9.26 per share; and • 60 per cent. to Equatorial's share price on 19 July 2006, the closingprice on the last day prior to the announcement of Quadra's offer. Antofagasta has entered into an agreement with AMP to acquire a 19.99 per cent.shareholding in Equatorial at A$8.00 per share. Accordingly, the totalconsideration payable by Antofagasta to acquire all of Equatorial's shares wouldbe approximately A$527 million (US$401 million). Equatorial reported cashbalances of A$127 million (US$97 million) as at 30 June 2006. Marcelo Awad, CEO of Antofagasta Minerals S.A., stated, "We have enjoyed anexcellent working relationship with Equatorial Mining at El Tesoro since theinitial development of the mine in 1999. The acquisition of Equatorial willgive Antofagasta outright ownership of El Tesoro and increase our attributableshare of copper production from a quality asset which we know and understandvery well. Additionally, full ownership of El Tesoro will complement ourexisting exploration and development interests in the Sierra Gorda district andprovide Antofagasta with the flexibility to optimise both the scheduling ofprojects and associated capital investment decisions." The Offer will be made by Sierra Gorda Copper Pty Limited, a wholly ownedsubsidiary of Antofagasta, by way of an off-market takeover bid under theAustralian Corporations Act 2001. The Offer will be funded from Antofagasta'sexisting cash resources. The Offer is conditional on acquiring at least 75 per cent of the number ofoutstanding ordinary shares in Equatorial and approval from the ForeignInvestment Review Board in Australia. The conditions of the Offer are outlinedin Appendix 1 to this press release. Antofagasta has also entered into an agreement with AMP, whereby AMP has agreedto pay Antofagasta a break-fee of A$4 million in the event that AMP do notaccept Antofagasta's Offer for the remainder of its shareholding in Equatorial. Antofagasta commenced the despatch of its Bidder's Statement to Equatorialshareholders today in Sydney, Australia. Rothschild is acting as financial adviser and Minter Ellison is acting as legaladviser in relation to the Offer. Enquiries - Chile / North America Enquiries - UK Antofagasta Minerals S.A.Antofagasta PLC Alejandro RiveraTel: +44 20 7808 0988 Tel: +56 2 377 5145www.antofagasta.co.uk Email: arivera@aminerals.cl Hussein Barma Rothschild Inc. (financial adviser)Email : hbarma@antofagasta.co.uk Tel: +1 202 862 1660 Hugo DrylandBankside ConsultantsTel: +44 20 7367 8873 Enquiries - AustraliaMob: +44 7885 356 639 Rothschild Australia (financial adviser)Keith Irons Tel: +61 2 9323 2000Email: keith@bankside.com Marshall Baillieu Chris Forman About Antofagasta PLC Antofagasta is a Chilean-based mining group listed on the London Stock Exchangeand is a constituent of the FTSE-100 index. Its principal mining assets includethe Los Pelambres, El Tesoro and Michilla mines and the Esperanza copperproject. In addition to copper mining, Antofagasta's interests include rail androad transport operations and water distribution. About Equatorial Mining Limited Equatorial is an Australian company listed on the Australian Stock Exchange andits primary asset is its 39% ownership interest in Minera El Tesoro, a Chileancompany which owns and operates the El Tesoro copper mine. Equatorial's otherassets include ownership interests in two exploration tenements in the vicinityof El Tesoro and the rights to extract ground water from the Calama aquifer,also in the same region. For the year ended 31 December 2005, Equatorial reported net profit before taxof A$68.4 million. Equatorial reported gross assets of A$263 million as at 31December 2005. El Tesoro is an open pit mine and heap leach and solvent extraction and electrowinning operation producing LME grade A copper cathode. For the year ended 31December 2005, El Tesoro produced 98,100 tonnes of copper cathode (100% terms).Proven and probable reserves of El Tesoro as of 31 December 2005 were 123.1million tonnes at a grade of 0.79% Cu using a 0.41% Cu cut-off grade (100%terms). Other Rothschild Inc. and Rothschild Australia Limited are advising Antofagasta and noone else in relation to the Offer and will not be responsible to anyone otherthan Antofagasta for providing the protections afforded to clients of RothschildInc. or Rothschild Australia Limited nor for providing advice in relation to theOffer. Appendix 1 Conditions of the Offer The Offer, and any contract resulting from the acceptance of the Offer, aresubject to the following conditions: (a) Minimum acceptance Before the end of the Offer Period, Sierra Gorda Copper Pty Limited and itsassociates have relevant interests in at least 75% of the Equatorial Shares. (b) FIRB One of the following occurs before the end of the Offer Period: (i) Antofagasta PLC or Sierra Gorda Copper Pty Limited receiveswritten notice issued by or on behalf of the Treasurer stating that there are noobjections under the Australian government's foreign investment policy to theacquisition by Sierra Gorda Copper Pty Limited of all of the Equatorial Sharesunder the Offer, such notice being unconditional; (ii) the expiry of the period provided under the ForeignAcquisitions and Takeovers Act 1975 (Cth) (FATA) during which the Treasurer maymake an order or an interim order under the FATA prohibiting the acquisition ofEquatorial Shares under the Offer, without such an order being made; or (iii) if an interim order is made under the FATA to prohibit theacquisition of Equatorial Shares under the Offer, the subsequent period formaking a final order has elapsed, without any such final order being made. Ends This information is provided by RNS The company news service from the London Stock Exchange