Former Kinross Gold CEO working on potential bid for Anglo assets – by Rachelle Younglai (Globe and Mail – July 14, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Kinross Gold Corp.’s former chief executive Tye Burt is interested in Anglo American PLC’s three copper mines in Chile, according to people familiar with the matter.

Mr. Burt is working with another former Kinross executive, Hugh Agro, to create another mining company after being ousted as Kinross’s CEO for a deal gone awry.

Mr. Burt and Mr. Agro, the former M&A executive at Kinross, are now seeking financing for a potential bid on the Anglo assets, the sources said.

Mr. Burt is one of many people who were given the opportunity to examine Anglo’s Mantoverde, Mantos Blancos and El Soldado mines.

Others include former Xstrata PLC CEO Mick Davis, who now runs a private mining entity called X2 Resources LLP, sources said.

However, most have passed on Anglo’s mines as they are not well regarded.

According to documents viewed by The Globe and Mail, Anglo spends around $2 (U.S.) to produce a pound of copper at Mantoverde and $2.20 at Mantos Blancos.

That excludes treatment and refining expenses, which could push production costs closer to $2.50 a pound. With the red metal trading around $2.50, Anglo is likely losing money on the mines.

Also, production at Mantoverde and Mantos Blancos has declined over the past five years. And although Anglo says the mines could continue producing metal for another 20 years, they can only do so if the new owner has capital to expand the mine.

Anglo is also selling its Chagres smelter in Chile, which it jointly owns with Codelco of Chile and Mitsubishi Corp. Its partners also own a non-controlling stake in El Soldado.

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