Companies: CFM   

A proposed cobalt development deal would give Congo player Dan Gertler 39.9 per cent of Central African Mining & Exploration Company (CAMEC).

CAMEC, steered by entrepreneurial chairman Phil Edmonds and development director Andrew Groves, has agreed to issue shares, notionally worth £366.6 million at today’s price, to Prairie International, a company controlled by the family of Israeli diamond dealer and powerful Congo player Dan Gertler. In exchange, Prairie will, if the deal is approved, cede to AIM-quoted CAMEC its half share of a joint venture between the two companies to develop Mukondo Mountain in the Democratic Republic of Congo’s Katanga province.

Mukondo is claimed to be possibly the richest cobalt mine in the world, with production targeted to rise from 400 to 1,000 tonnes a month. The proposed deal would make Prairie the biggest shareholder in CAMEC and must give rise to speculation about further moves.

CAMEC recently failed in a bid for Congo-focused copper developer Katanga Mining (now part of AIM-quoted Nikanor, of which the Gertler clan also has a stake). The company was involved in controversy with the Congo authorities over the source of some of its licences in the country.

The DRC is completing a review of mining and exploration licences awarded. Ministers have said recently there are problems with a high proportion of them.

The Mukondo joint venture, which covers several other properties as well, is a potentially rich prize. CAMEC shares, which soared from 9p in 2005 to 97p the following year, later tumbled to 20.25p amid all the controversy.

Mentioned by Growth Company Investor as a recovery punt at 25.5p last October, they are now 45p, up 5p this morning, valuing the company at £553 million. Their appeal is speculative.

Growth Company Investor subscribers have full access to all our AIM and small-cap share recommendations. To subscribe today with a half-price offer, and gain immediate access to all the recommendations, click here.

Central African Mining & Exploration Company	AIM	£587.27m	24.75p	-0.75p
Click here for interactive charting
Other company articles:
Miners wait for the call			31/03/2008
Still scrambling for Africa			07/02/2008
CAMEC plans new Congo deal			07/02/2008
Congo miners plan £2bn merger			06/11/2007
Exploration Insights			05/10/2007