ENRC has announced the Acquisition of the Remaining 49.5% of the Shares in Camrose and Minority Shareholdings in Certain Camrose Subsidiaries


7 December 2012

Eurasian Natural Resources Corporation PLC

ENRC has announced the Acquisition of the Remaining 49.5% of the Shares in Camrose Resources Limited and the Outstanding Minority Shareholdings in Certain Camrose Subsidiaries

London – Eurasian Natural Resources Corporation PLC („ENRC‟ or, together with its subsidiaries, the „Group‟) today announces the proposed private acquisition by its wholly owned subsidiary, ENRC Congo BV, of the remaining 49.5% of the share capital of Camrose Resources Limited („Camrose‟), as well as the outstanding minority shareholdings in certain Camrose subsidiaries, for an aggregate cash payment of US$550 million (together, the „Acquisition‟). The transaction is expected to complete by 28 December 2012.

Simplifying the Group‟s organisational structure and consolidating its position within the Democratic Republic of the Congo („DRC‟) are key strategic priorities for the Group and will allow the Group to optimise the value of the Camrose assets. The Group expects Camrose’s assets to generate significant profits and positive cash-flows when development is complete. ENRC will also benefit from increased operational synergies across its regional copper and cobalt operations, including the optimisation of material flows, the ability to leverage ENRC‟s existing marketing organisation, as well as the eventual integration of the processing plants associated with the Roan Tailings and Reclamation („RTR‟) Project (formerly referred to as KMT) and other ENRC processing facilities and the Camrose Group‟s extraction licences.

Camrose holds interests in various high quality copper and cobalt exploitation licences in the DRC, which include:

- a 70% indirect interest in Metalkol, which owns the tailings exploitation licence for the RTR Project, with DRC state-owned entities holding the minority 30% interest. This licence has a total resource of 112.8 million tonnes, grading 1.49% copper and 0.32% cobalt;

- 45,400,000 common shares of TSX-listed Africo Resources Limited („Africo‟), representing approximately 64% of Africo. Africo owns an indirect 75% interest in Swanmines Sprl which holds the Kalukundi permit, the remaining 25% of which is held by Gécamines; and

- a 55% indirect interest in La Congolaise des Mines et de Développement Sprl („Comide‟), covering four licences, with a total resource of 34.7 million tonnes, grading 2.02% copper and 0.23% cobalt.

Near-term production potential from the Camrose assets is approximately 100 thousand copper contained tonnes per annum, with capital expenditure in 2013 estimated at around US$300 million.

The remaining 49.5% of Camrose and a 50% interest in Daletona Properties Limited will be purchased from Cerida Global Limited („Cerida‟), while the outstanding minority stake in Comide will be purchased indirectly through Cerida, as well as from Straker International Corp. („Straker‟). In addition, ENRC Congo BV will also acquire one issued share in each of Akam Mining Sprl (‘Akam’) and Simplex Holding Sprl (‘Simplex’), which are subsidiaries of Camrose, from Mr Medard Palankoy.

The cash consideration payable by ENRC Congo BV on completion of the Acquisition (‘Completion’) will be satisfied by:

- ENRC Congo BV paying to Metalkol (on behalf of Cerida) the total amount of principal and accrued interest outstanding and owing to Metalkol as at Completion under a US$5,000,000 loan agreement effective as of 13 October 2010 and entered into between Metalkol (as lender) and Cerida (as borrower) (the “Metalkol Loan”). Assuming that Completion takes place on 28 December 2012 and no repayments are made prior to such date, the total amount of principal and accrued interest outstanding and owing to Metalkol in respect of the Metalkol Loan is expected to be US$5,883,333; and

- ENRC Congo BV paying the balance of the consideration owing to Cerida (equal to US$550 million less the total amount payable to Metalkol to discharge the Metalkol Loan) in cash at Completion for the benefit of Cerida.

As a result of the Acquisition, Comide will be indirectly wholly owned by ENRC. Following Completion, Metalkol will remain 30% owned by DRC state-owned entities and Gécamines will continue to hold the minority 25% stake in Swanmines (the remaining 75% of which is held indirectly by Africo, in which ENRC Congo BV will hold an indirect 64% interest).

Cerida is being treated as a related party of ENRC as a consequence of its interest in Camrose. Cerida is an indirect, wholly owned subsidiary of Fleurette Properties Limited (‘Fleurette’), whose entire issued share capital is, in turn, indirectly and wholly owned by a discretionary trust for the benefit of the wife and children of Mr. Dan Gertler. Fleurette and its subsidiary, Straker, are associates of Cerida. Mr. Palankoy holds the share in Akam and Simplex as nominee for other subsidiaries of Camrose. As far as ENRC is aware, Mr. Palankoy is not an associate of Cerida but is a lawyer with the DRC firm Cabinet Palankoy and acts for the Fleurette group. However, because Mr. Medard Palankoy is a director of the operating subsidiaries of Camrose he is also being treated as a related party for the purposes of the Acquisition.

The proposed transaction constitutes a related party transaction under the Listing Rules and, as a result, requires the approval of ENRC shareholders at a General Meeting, which is to take place on Friday, 28 December 2012. A circular containing further details of the proposed transaction and setting out the notice of the General Meeting and the resolution required to approve the proposed transaction will be sent to ENRC shareholders today. The circular includes an updated Competent Person‟s Report on the mineral assets of Comide and Metalkol by SRK Consulting.

The Board of Directors of ENRC, which has been so advised by Morgan Stanley, considers the Acquisition to be fair and reasonable so far as ENRC Shareholders are concerned. In providing its advice to the Board of Directors of ENRC, Morgan Stanley has taken into account the Board of Directors’ commercial assessments of the Acquisition. In addition, the independent non-executive Directors of ENRC, who have been so advised by Lazard, consider that the terms of the Acquisition are fair and reasonable so far as ENRC Shareholders are concerned. In providing its advice to the independent non-executive directors of ENRC, Lazard has taken into account the independent non-executive Directors’ commercial assessments of the Acquisition.

The Board considers the Acquisition to be in the best interests of ENRC Shareholders as a whole. Accordingly, the Board unanimously recommends ENRC Shareholders to vote in favour of the Resolution at the General Meeting.

Commenting on the proposed transaction, Felix J Vulis, Chief Executive Officer of ENRC, said: “Consolidating our ownership of Camrose will be an important step forward for the Group, enabling us to gain maximum benefit from the development of these assets and to continue to support our strategy and ambition of becoming a material African copper producer.”

Mehmet Dalman, Chairman of ENRC, said: “This transaction will successfully complete our long term strategy of consolidating our African copper and cobalt interests, enabling us to take full control and responsibility for these assets to deliver significant value to our shareholders. This transaction is an integral part of the corporate governance and company structure optimisation which I set as a key priority when I assumed chairmanship. The transaction creates one of the largest copper producers in the African copperbelt, targeting in excess of 200 thousand tonnes per annum of copper over the next 5 years”.

There will be a conference call to discuss the proposed transaction at 9:30am on Monday, 10 December 2012. The dial-in number is +44(0)20 3140 8286 and the pass code is 8407438.