Toho Zinc Agrees with CBH Resources to Take CBH’s All Shares

Toho Zinc announced at the end of April the firm agreed with CBH Resources, Toho Zinc’s equity method affiliate in Australia, to acquire all remained shares of CBH Resources at A$ 250 million (approximately 21 billion yen). CBH Resources becomes Toho Zinc’s 100% subsidiary. In the case that the agreement is ruptured, CBH Resources is obliged to pay a penalty of A$ 1.5 million to Toho Zinc. As a result of this acquisition, Toho Zinc will become to cover 80% of its zinc concentrate consumption by ores produced at the mines in which Toho Zinc holds shares in and after 2013.

CBH Resources owns Endeavor zinc and lead mine in New South Wales, eastern Australia. The current zinc concentrate production is 60,000 tonnes per year. Toho Zinc is the top share holder in CBH Resources with 24.1% shares. Toho Zinc has purchased all concentrates produced at Endeavor mine to consume at Annaka smelter in Gunma, Japan as materials for electrolytic zinc ingots.

CBH Resources received the first buyout offer from Nyrstar, a major zinc producer in Belgium, in December 2009. After the bidding battles, Toho Zinc finally decided to make CBH Resources its 100% subsidiary in order to secure raw materials stably for medium and long terms.

Toho Zinc gains equities in Rasp mine and Panorama mine as a result of the CBH Resources’ acquisition. Rasp mine is scheduled to enter commercial operation in 2013 while Panorama mine’s development hasn’t commenced yet. Toho Zinc prepares the acquiring funds by self resources and finances from banks. For Rasp mine’s development, Toho Zinc may seek the financial support by Japan Bank for International Cooperation. Toho Zinc becomes able to secure 80% of its zinc concentrate consumption from its own mines after Rasp mine starts commercial production.