Peru Atacocha zinc-lead miner says shareholders may sell control

Tag : zinc
Peruvian zinc-lead mining company Cia. Minera Atacocha said thisweek that a group of leading shareholders is in talks with "third-partyinvestors" in what could result in a sale of a controlling stake in the company. Atacocha, which recently reported a 45% plunge insecond-quarter net income because of lower zinc prices from a year ago and lower leadvolume sold, said in a filing to Lima stock exchange authorities that itsboard of directors learned this week of the negotiations which could involvea sale of more than 50% of the company's Class A shares. The statement saidnegotiations were in an early stage without certainty as to whether they wouldbe successful. The statement said individual investors, not thecompany, who are in the talks, so that it has no information on the parties, stockvolume or premium over share price that the transaction would involve. Brazil's Votorantim Metais, which owns a Cajamarquilla zincrefinery near Lima, has been in the market to buy a local zinc producer, havingseen a failed attempt to take over zinc miner Milpo earlier this year. Atthe time, the company said it was giving up on its efforts to buy Milpo. The company can use the zinc production to assure a supply forits refinery, which is already connected by railway to areas whereAtacocha produces. According to recent output figures, Atacocha produced27,026 mt of zinc in April-June or 4% below what was produced in the firstquarter of 2007; 3,422 mt of lead or 16% below what was produced a year ago. It alsosaid it produced 1,276 mt of copper or 9% more than what was produced inthe first quarter of 2008. Zinc concentrate sales amounted to 54,127 mt in the first halfof 2008, compared with 53,409 mt in the same period last year. Leadconcentrate totaled 7,569 mt in the first half of the year, a 32% decline from a yearago. Copper concentrate sales in the first half of 2008 fell 51% to 2,302 mt,compared with the same period a year ago, recent date showed. Atacocha also said its investments dropped 52% in January-June2008 to $19.6 million, compared with $40.9 million a year ago, a differencemainly due to completion last year of a tailings deposit. The company said itsQ2 mineral deposit reserves stand at 7.7 million mt of ore with grades of2.35% lead, 5.5% zinc, 0.34% copper, as well as 3.32 oz silver per mt and 0.012oz of gold per mt. --Renzo Pipoli newsdesk@platts.com For more news, request a free trial to Platts Metals Week at http://www.platts.com/Request%20More%20Information/index.xml?src=story or subscribe now at http://getmetalsweek.platts.com