HK Miner Taps Morgan Stanley for Peru Sale

Hong-Kong based CST Mining has hired Morgan Stanley to advise on the sale of its stake in Peru’s Mina Justa project, just weeks after a sale to global trader Glencore fell through. Morgan Stanley will advise in the disposal of the stake in the mine which CST indirectly owns through its 70% stake in Peruvian miner Marcobre. The remaining 30% in Marcobre is owned by LS-Nikko Copper and Korea Resources. Officials at CST could not immediately be reached for additional details. In June, CST struck a deal to sell Mina Justa to Glencore for $475m, but it fell through reportedly after the parties failed to agree on an offtake agreement for the mine’s future production. At the time, analysts saw the deal as fairly priced. Liberum Capital estimated the $475m transaction had an implied enterprise value to reserves, taking out capex, of $0.54 per pound. This was lower than Vale’s $1.13bn offer for African miner Metorex in April, which Liberum estimated at $0.94 per pound. CST originally acquired the mining assets in February 2010 when it paid $250m for Chariot Resources which owned a 70% stake in Marcobre.