JOHANNESBURG (Reuters) - Canada-listed junior miner AJN Resources (CD:AJN) dismissed an attempt to block the company's plan to buy five gold projects in Democratic Republic of Congo and said the country needed it to bring value to the assets.
Civil society groups on Thursday called on the president and prime minister to block a draft deal announced in early February, which cabinet meeting minutes showed last week is awaiting their approval.
Under the deal, AJN Resources' Congo unit would acquire stakes of between 30% and 35% in five gold projects in eastern Congo from state-owned gold company Société Minière de Kilo-Moto (SOKIMO) in exchange for a 60% stake in AJN.
AJN Resources says the agreement would help SOKIMO raise money on international markets to develop the projects.
CEO Klaus Eckhof dismissed a statement from five civil society groups under the banner "Le Congo n'est pas a vendre" (Congo is not for sale) as a joke and told Reuters by phone the assets would have little value without him.
"If I'm in the company [the assets] will have a big value, if I'm not in the company they will have a small value," he said.
The civil society groups said AJN lacks the financial clout and expertise necessary to revive SOKIMO.
"It seems like AJN needs SOKIMO more than SOKIMO needs AJN," Jimmy Munguriek, permanent secretary at Ituri province civil society group CdC/RN, said.
AJN Resources has a market capitalisation of 9.723 million Canadian dollars ($7.13 million) and its June 1 financial statement showed it made a $2.1 million loss in the nine months to April 30.
The February draft deal also set out AJN's purchase of SOKIMO's 10% stake in the Kibali gold mine, which Barrick Gold (TO:ABX) operates. Barrick moved to block that purchase, causing AJN to scrap that part of the deal in early March.
AJN plans to acquire from SOKIMO its 30% stakes in Zani-Kodo, Nizi, and Kibali South, and 35% stakes in Giro Goldfields and Wanga (Tendao).
($1 = 1.3638 Canadian dollars)