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Sterlite completes the acquisition of Black Mountain mines in South Africa
On February 4, 2011, Sterlite Industries (Sterlite) announced that it has completed the
acquisition of a 74% stake in Black Mountain Mining (Pty) Ltd. for a total consideration of
US $348mn. The acquisition includes Black Mountain zinc mine and the Gamsberg zinc
project. Gamsberg has one of the largest untapped zinc deposits in the world, with JORC
mineral resource of 186mn tonnes of ore. As per the company, the current production
capacity at the mine stands at 400ktpa of zinc metal. With rising prices of zinc and lead, we
believe this acquisition is EPS-accretive for Sterlite’s shareholders. At the CMP of `169,
Sterlite is trading at 6.8x FY2011E and 5.0x FY2012E EV/EBITDA. We maintain Buy on the
stock with an SOTP-based Target Price of `206.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sterlite completes the acquisition of Black Mountain mines in South Africa
On February 4, 2011, Sterlite Industries (Sterlite) announced that it has completed the
acquisition of a 74% stake in Black Mountain Mining (Pty) Ltd. for a total consideration of
US $348mn. The acquisition includes Black Mountain zinc mine and the Gamsberg zinc
project. Gamsberg has one of the largest untapped zinc deposits in the world, with JORC
mineral resource of 186mn tonnes of ore. As per the company, the current production
capacity at the mine stands at 400ktpa of zinc metal. With rising prices of zinc and lead, we
believe this acquisition is EPS-accretive for Sterlite’s shareholders. At the CMP of `169,
Sterlite is trading at 6.8x FY2011E and 5.0x FY2012E EV/EBITDA. We maintain Buy on the
stock with an SOTP-based Target Price of `206.
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