/ 8 September 2008

Mvela says no talks with Aquarius, Lonmin

South Africa’s Mvelaphanda Resources denied on Monday it was in talks with Aquarius Platinum about a possible merger with the world’s number three platinum producer Lonmin.

”At the moment we haven’t had discussions with Aquarius about anything like that,” said James Wellsted, executive commercial manager of Mvela.

The Sunday Telegraph said Lonmin, which has spurned a £33 per share takeover offer from Xstrata, was in talks about a three-way merger with Aquarius and Mvelaphanda.

Wellsted said players in the platinum sector had held informal discussions in the past about consolidation, but Mvela had not been in contact with either Aquarius or Lonmin since Xstrata’s proposed bid was announced on August 6.

”There have been discussions with most companies in the sector, everybody’s looking about how to unlock value, but as to specific transactions with Aquarius or Lonmin, we haven’t had that level of discussions,” he said

Neither Lonmin nor Aquarius were immediately available to comment on the Telegraph article. The newspaper story referred to Mvelaphanda Group, but that firm no longer has any interests in mining after hiving off Mvela Resources.

Mvela Group was also not immediately available for comment.

Last week, Lonmin again rejected Xstrata’s $10-billion takeover bid as too low, but said it wanted talks with its hostile suitor on potential synergies.

Lonmin said it was exploring options, but declined to say if other parties had approached Lonmin about a counter bid.

Chairman John Craven said the focus was on creating value for shareholders, not remaining independent.

Lonmin shares rose 2,3% to £33,04 by 9.10am GMT, underperforming a 5% increase in the UK mining index as the sector benefitted from optimism over Washington’s bailout of mortgage finance firms Fannie Mae and Freddie Mac.

Aquarius surged 8,9%, which one trader attributed to short covering, and Mvela Resources gained 3%. – Reuters