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A Final Fling For Eurasian Natural Resources Corporation

Eurasian Natural Resources Corporation (LSE: ENRC) is unlikely to be with us much longer, as the Kazakh miner will soon be bought back by its three co-founders and the Kazakh government.

Few investors are likely to be sad to see it go. Floated at 540p at the end of 2007, the shares enjoyed a good run initially, but have been dogged by scandals and corporate governance concerns in recent years.

Its shares now trade at just 220p, where it clings on the lower reaches of the FTSE 100 despite a market cap of just £2.8bn and a free float (i.e. shares available for public trading) of less than 20%.

As well as the stakes held by the company’s co-founders and the Kazakh government, London’s other Kazakh-based miner, Kazakhmys (LSE: KAZ), has a 26% holding. Kazakhmys is keen to get rid of its position to boost its cash reserves, even though it reckons the proposed bid is on the low side.

At least Eurasian Natural Resources Corporation looks set to bow out with a decent operational performance, with its second-quarter operational statistics showing a clean sweep of volume increases.

Felix J Vulis, chief executive officer, said:

Our operations in Kazakhstan and Africa have had an excellent quarter. Production volumes are up year-on-year across all of our key commodities, with the Iron Ore Division having had its best quarter in 3 years. In Africa we have continued to ramp up copper volumes with new production coming from both Frontier and Chambishi, in line with the targets for the development of our African copper business.

Last year the company produced a pre-tax loss of $0.6bn on sales of just over $6bn, thanks to a hefty $1.2bn of impairment charges. Next Wednesday, it is due to produce its financial figures for the first half of 2013, so we will see then how well this production increase has flowed through into profits.

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> Stuart does not own any share mentioned in this article.