A $1.4 billion-valued Bermuda-registered mining company could soon be combined with Central African Mining and Exploration Company to form a company with the potential to be the world's largest cobalt producer and one of the largest copper producers in the Democratic Republic of Congo.

An offer has been made by the Central African Mining and Exploration Company (CAMEC) to buy all the shares of Katanga Mining Limited.

Katanga is a Bermuda company which trades on the Toronto Stock Exchange.

The share buying offer would be made on the basis of 17 common shares of CAMEC for one of Katanga.

Last Monday the closing trading price of Katanga shares on the TSX was C$22.50, while the following day the closing trading price on the UK's AIM exchange of CAMEC shares was 52p (C$1.05), implying a value for the CAMEC Offer of C$17.80 per Katanga share at that date and giving Katanga an offer value of C$1.518bn ($1.43bn).

The average Katanga share price for the 30 days prior to CAMEC's announcement on May 4 that it had acquired a 22 percent stake in Katanga was $13.30.

Based on publicly announced production targets for both CAMEC and Katanga, the combined entity will have a targeted production capacity of approximately 250,000 tonnes of copper and 20,000 tonnes of cobalt per year. At full production, CAMEC would produce approximately 60 percent of the cobalt and Katanga 60 percent of the copper for the combined entity

Upon completion of the proposed deal CAMEC will maintain its current listing on AIM and will apply for a listing on a Canadian Stock Exchange.

CAMEC management intends to meet with as many Katanga shareholders as possible in the coming weeks, the company said.

Phil Edmonds, chairman of CAMEC, said: "We believe that the combination of CAMEC with Katanga will benefit both sets of shareholders and position the enlarged business to take an active role in any further consolidation of the sector in the DRC.

"Together with the shares we hold, the offer has the support of shareholders representing approximately 54 percent of Katanga's shares. I encourage the remaining Katanga shareholders to accept our offer and participate in the creation of a leading international copper and cobalt company."

Katanga is engaged in the acquisition and development of mineral properties and is currently focused on the refurbishment and rehabilitation of the Kamoto/Dima mining complex in the DRC. The first copper from this property is due to be shipped in December 2007, with full production to be reached in 2011 following completion of the four-phase rehabilitation of the brownfield site.

In February 2004, Katanga entered into a joint venture agreement with Gecamines, a state-owned and operated mining enterprise of the DRC, to rehabilitate certain assets which include exploration and mining properties, the Kamoto concentrator, the Luilu metallurgical plant, the Kamoto underground mine and various oxide open pit resources in the Kolwezi district of the DRC.