The Financial Post reports in its Saturday, Oct. 23, edition that Lundin Mining and Freeport McMoRan Copper & Gold have obtained a bit of stability in the Democratic Republic of the Congo after they reached agreement on contract terms with the government covering the massive Tenke Fungurume copper-cobalt mine.
The Post's Jonathan Ratner and Peter Koven write that the deal removes a significant political risk overhang over the two companies, and particularly Lundin Mining. The news has been good to Lundin's stock. Last Tuesday, Lundin shares finished at $5.47. On Friday Lundin closed at $6.75.
While the new agreement includes some concessions by Freeport and Lundin, analysts do not consider them to be excessively onerous.
RBC Capital Markets analyst Fraser Phillips says, "Freeport and Lundin now have the greater confidence level needed to make further capital investments at Tenke, leading the way for them to capture its significant upside potential." Mr. Phillips considers the deal to be a positive catalyst for Lundin.
The new arrangement includes an increase in the ownership interest of state-owned Gecamines to 20 per cent from 17.5 per cent, which will come from both Freeport and Lundin.
© 2024 Canjex Publishing Ltd. All rights reserved.