Maaden to offer 50 per cent shares in July IPO

JEDDAH — Maaden (Saudi Arabian Mining Company) will offer 50 per cent of its shares totalling 462,500 in an Initial Public Offering (IPO) in early July 2008. A proportion of these shares will be made available to investment funds and licenced individuals. The period for public subscription to the IPO will be from July 5-14, 2008. The share price will be SR20 — SR10 nominal value and SR10 premium. This was set in accordance with the decision of the Council of Ministers (number 72 dated 3/4/1427H).

By Our Correspondent

Published: Tue 24 Jun 2008, 12:04 AM

Last updated: Sun 5 Apr 2015, 1:12 PM

Abdullah Al-Dabbagh, president and CEO of Maaden said at a press conference in Riyadh on Saturday that the offering will be the largest floatation in the region's minerals sector and the first of its kind in Saudi Arabia.

He said that he anticipated high demand for the shares because of the company's strong reputation within the Kingdom and investor confidence generated by its track record in the minerals sector.

He explained that the allocation to retail subscribers will take place in two stages. In the first stage, each subscriber will get a minimum of 25 shares. In the second stage, up to 2,000 shares will be allocated to subscribers who have applied for more than 25 shares as long as the total shares allocated do not exceed total shares offered to retail subscribers. The balance of the offer shares, if available, will be allocated on a pro-rata basis.

He expressed appreciation to the Capital Market Authority for its support during preparation for the offering.

Al Dabbagh said that the decision to offer shares was both part of Maaden's expansion strategy and a means to broaden the ownership base among Saudi public. "Maaden has achieved a pioneering position in the minerals sector at national and regional levels, and intends to further strengthen this position," he added.

Prior to the issuing of the IPO, Maaden will publish a prospectus for investors containing information about the company. Details of the share price, financial statements and other information about the company, its activities and management will be set out for potential investors.

The announcement of the IPO comes at a time when Maaden is engaged in expansion to achieve its aim to be the third pillar of the Saudi economy. Earlier this month, it signed a Heads of Agreement with Rio Tinto Alcan to develop an integrated "mine-to-metal" project to produce 740,000 tones of aluminium within the minerals industries complex at Ras Az Zawr in the Eastern Province. Late last year it finalised arrangements with Saudi Basic Industries Corporation (SABIC) to develop the Kingdom's substantial phosphate deposits.

Maaden is the first company in the region to invest in major projects in the mineral sector. Currently, Maaden is involved in investments of SR60 billion in its projects to develop gold and industrial minerals as well as the bauxite and phosphate projects.

"Maaden adopts recognised industry's best practices and latest technologies to succeed in its aims of becoming a world class minerals enterprise and achieving value for its shareholders," said Al Dabbagh.

Maaden is also the Kingdom's largest gold producer, delivering around 200,000 ounces of gold a year in addition to other precious and base metals, including silver and zinc.

Maaden has six mines. The company's gold and base metals division operates five mines which have combined reserves of 1.3 million ounces of gold ore.

According to Al Dabbagh the increase in gold prices in the international gold market will accelerate the mining investment and will encourage the investor to seize mining opportunities in the precious metals in the Kingdom.

Maaden also has an ambitious exploration programme that has identified 8 million ounces of measured, indicated and inferred resources.

Diversification, away from dependence on oil exports, has long been a major Saudi government objective. Given that aim, it is more than fortuitous that the Kingdom turns out to be endowed with significant mineral resources other than hydrocarbons.

Exploration activities in the Kingdom have identified the presence of over 50 gold and numerous base-metal deposits as well as valuable industrial minerals.

As a result, Maaden was established in 1997 to bring together a number of diverse mining interests and develop the mineral resources of Saudi Arabia on commercial lines.

The materials Maaden will produce are going to be the basis for another massive downstream sector on top of the petrochemical one. It will create vast numbers of jobs for Saudi nationals, create local service industries and offer the chance to create new businesses and partnerships for Saudi and international companies alike. The catalyst for all this potential is the mining and processing of two minerals - bauxite and phosphate.

Bauxite is chiefly used for the production of aluminium but can also be used in the production of cement. Aluminium, which is to be produced directly by Maaden in a mega project with international mining giant Rio Tinto Alcan, has a range of uses - from construction, aerospace and transportation to packaging. Phosphate, which will be produced by another Maaden mega project (this time with local joint venture partner SABIC), will be used to make fertilisers. Phosphate is also used in several industries including food and beverages, pharmaceuticals and cosmetics.

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