News

December 09, 2008

International Barytex Will Become An Acquisitor Early Next Year When Touch Lucky Investments Pays Up For Shituru

By Charles Wyatt

Another company that’s been quick on its feet in meeting the pressures presented by the current financial problems is International Barytex Resources, which has decided to sell its stake in the Shituru copper project in the Democratic Republic of Congo (DRC) to a Chinese company called Touch Lucky Investments. Minority shareholders are also selling out. This deal makes a lot of sense as the project is poised on the edge of development following a positive feasibility study which was delivered earlier in the year. That study proposed an open pit, ore processing and electrowinning facility with an annual production capacity of 38,000 tonnes of LME-grade cathode copper at an initial capital cost of US$338 million. The scope of the project is hence largely unchanged from the earlier preliminary assessment except that the processing rate has been reduced to 900,000 tonnes per year as a result of changes in the production schedule which enable copper production to be maintained using higher grades.

The feasibility study also showed a significant increase in the capital cost, which rose from US$228 million. Chief executive Alf Hills puts this down to the general increase in material and supply costs and labour costs that’s currently being experienced in the DRC. Whether this still pertains in the present climate of lower energy and material costs is largely irrelevant, as US$228 million is basically out of reach for the company without massive dilution. Even so, International Barytex has...