Boseto copper mines closes

Miners at copper producer, Boseto Copper mine this morning (Friday) were told by management to leave mine premises with immediate effect, halting production at the country’s second copper mine.

A source told Botswana Guardian online that “all employees of the company including sub-contractors have been told to leave as the company has been place under voluntary administration’. An official working for one of the sub-contractors at the troubled mine said all there was panic, caused by the sudden news, but in the end, the mining area was clear of people by 10 am of the same day. Johannesburg Stock Exchange (JSE) listed company, Basel Read is currently the main sub-contractor at Boseto. The mine was opened three ago. Reports reaching this publication are that the company has failed to pay its lenders.

BG could not establish the veracity of the reports.  Interestingly the closure of the mine comes weeks after it was announced a multi-million-dollar deal with an international financier has been reached with parent company-Discovery Metals Limited (DML). DML Botswana general manager, Mokwena Morulane travelled to Toteng on Thursday for a meeting with mine’s management. He could not be reached for comment as his phone was off by 2:30 pm today. Several attempts by BG online edition team to talk to officials at the Boseto mine proved futile as company phones rang unanswered. At the company head office at the leafy Phakalane, an official said the mine has been closed, but she could not state reasons. The close of the mine comes after months of negotiations between the Brisbane-based DML and potential lenders.

The junior copper miner has in the past two years experienced poor cash flow, resulting with the miner defaulting in some of its loans. On its website, DML announced that the Board has appointed Stefan Dopking and Michael Ryan of FTI Consulting as Voluntary Administrators of the Company under Part 5.3A of the Corporations Act.   The decision to appoint Voluntary Administrators follows the receipt earlier today (Friday) of correspondence from DML’s Lender Group, said a statement. DML’s Lender Group has demanded full and immediate repayment by DML of all monies (comprising principal repayments, interest and costs).  

According to the update, DML and Cupric have been unable to agree the terms of a binding Terms Sheet Agreement by 31 January 2015 and accordingly the Exclusivity Period is now at an end.
On 9 February 2015, the Company entered into a Memorandum of Understanding (MOU) with Castlepines Global Equities Limited.    Under the terms of the MOU, Castlepines proposed to invest US$110,000,000 into the Company’s wholly owned subsidiary Discovery Copper (Botswana) (Proprietary) Limited (DCB), which would provide Castlepines with a 34 percent interest in DCB.  Today Friday, the Australian Securities Exchange (ASX) suspended immediate the copper mining company’s securities from quotation, following the appointment of voluntary administrators. The company is also listed at Botswana Stock Exchange (BSE).

The closure of the mines comes after plans to sell Boseto to Cupric Canyon Capital LP collapsed as the two parties failed to reach an agreement.  In a statement DML announced that as of 31 January 2015, the Exclusivity Period entered into with Cupric (as announced on 2 December 2014) has expired.With speculation the company has failed to pay lenders, BG online could not establish the status of recently signed deal of about P1 billion deal with Castlepines Global Equities Limited. Morulane revealed that the deal has to go for 90 days of due diligence before it is completed.

Last modified on Friday, 27 February 2015 15:29

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