Vedanta to buy Sterlite Gold

13.06.2006
Money Week

Tumbling metal prices had Vedanta Resources deep in the red, although the group announced details of an agreement to buy miner Sterlite Gold for C$68.45m, or C$0.258 a share in cash.

As part of the deal, Vedanta has entered into an agreement to acquire Twin Star International Ltd, the holder of 55% of Sterlite's shares, for C$37.68m.

Sterlite Gold's principal assets are located in Armenia and include an open pit gold mine at Zod and a gold processing plant at Ararat.

In October 2004, Sterlite announced measured and indicated resources estimated at 2.1m ounces.

"Vedanta believes that the acquisition offers an attractive low risk exposure to this commodity and provides the opportunity to deploy its proven project development skills," it said in a statement.

It reckons Zod has the potential to be a world class mine, with existing development potential in addition to exploration upside.

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