Toho Zinc Sends Bidder’s Statement to CBH Resources’ Shareholders

Toho Zinc sent a bidder’s statement to CBH Resources’ shareholders to make CBH Resources a 100% subsidiary. CBH Resources, a zinc and lead miner in Australia, is presently Toho Zinc’s equity method affiliate. Toho Zinc will pay 24 Australian cents per share of CBH Resources and the total payment will be A$ 249 million (approximately 21 billion yen calculated by 85 yen per Australian dollar). If there was another proposal to offer higher payment until the application deadline on July 7, Toho Zinc will review the offer price.

Mr. Tatsuya Tejima, Toho Zinc’s president, explained the firm generates 6 billion yen fund internally, draws 5 billion yen from the credit facility and utilizes 14 billion yen of outstanding commercial paper for the acquisition. He said the firm also gained positive comments from the main financing banks to support the transaction totally.

Toho Zinc is presently the top shareholder of CBH Resources with 24.1% equity, purchasing zinc concentrate at 60,000 tonnes per year from Endeavor mine in New South Wales, Australia. This accounts for 25% in zinc concentrate consumption by Annaka smelter, Toho Zinc’s smelting site in Gunma Prefecture, Japan. Endeavor mine is scheduled to finish output reduction in July and increase its annual production to 100,000 tonnes.

CBH Resources also holds Rasp mine under development. Rasp mine is scheduled to start zinc concentrate production at 90,000 tonnes per year and lead concentrate production at 60,000 tonnes per year in 2013. Toho Zinc’s ore using rate supplied from own investing mines will surge to 80% for zinc and 75% for lead when Endeavor mine and Rasp mine are both in operations.