The
management of Geovic Mining Corp. would like investors to know that the
financing angle outlined in this article is only one of several potential
financing methods the company is investigating, and would only comprise part of
the financing required to get Nkamouna into production.
Geovic Seeking Asian Financing for Cameroon Cobalt Project
By Stewart Bailey
May 27 (Bloomberg) -- Geovic Mining Corp., planning
to develop the world's largest primary cobalt mine, said it's in talks with
companies from Japan, Korea and China to help finance the $398 million project
in Cameroon.
Citigroup Inc., Geovic's adviser, is leading talks to get Asian companies to
commit to buy metal from the mine at set prices so government agencies in those
countries will be more willing to fund the mine's development, Chief Executive
Officer Jack Sherborne said.
A Japanese government agency ``would finance as long as there was a Japanese
company involved in the offtake,'' Sherborne said today in an interview. ``That's the type of discussion that we'd be holding with a
number of these outfits in the Far East.''
Geovic, based in Grand Junction, Colorado, wants to take advantage of rising
prices for cobalt, used in rechargeable batteries and aircraft turbines. The
price has tripled in three years as output from Democratic Republic of Congo,
with the world's largest cobalt reserves, has been hampered by shortages of
skilled labor, power and good roads.
An ``ideal'' sales contract for the mine's output would have a floor of $17 a
pound and a ceiling of as much as $45, Chief Operating Officer David Beling
said. He wouldn't name prospective lenders and buyers of the metal, saying the
talks are confidential.
Cobalt traded at $48.50 a pound today, according to Metal Bulletin. Geovic will
produce the metal at a cost of $3.12 a pound, according to a presentation
posted on the company's Web site.
Financing
The company is looking for financing to cover as much as 60 percent of the
mine's total cost, Sherborne said in an interview from Grand Junction. Geovic
controls a 60 percent stake in the mine and the Cameroon government and
domestic investors own the remainder.
A review of Geovic's feasibility study, aimed at cutting the project's
development cost by as much as 12 percent to $350 million, will be complete by
July, Beling said. The company expects to begin construction in November, he
said.
The Nkamouna mine, about 400 kilometers (249 miles) southeast of the capital
Yaounde, is scheduled to be completed by July 2010. It will yield about 4,100
metric tons of cobalt a year, according to Geovic's Web site.
That would make the company the second-largest producer of the metal behind OM
Group, which had output of 9,100 tons last year, and put it ahead of Xstrata
Plc, which produced 3,929 tons, according to the Cobalt Development Institute.
The metal is most often produced as a byproduct from copper and nickel mines.
Nkamouna would be the world's largest deposit where cobalt is the primary metal
mined.
For more information contact:
Keith Schaefer
Vanguard Shareholder Solutions
Tel: 604-608-0824
Toll Free: 1-866-891-9756
Geovic Mining
Vanguard Shareholder Solutions
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