Batista planning to sell control in Colombian gold mining subsidiary AUX

Brazilian tycoon Eike Batista plans to raise US$2bn-US$4bn by selling control in AUX, the Colombian gold mining subsidiary of his EBX group. Batista's plans for AUX include keeping a minority stake and transferring about US$2.5bn in debt, sources were quoted as saying to Dow Jones. However, the debt-laden entrepreneur may have to wait until international gold prices stabilize. The yellow metal has shown volatility with the expectation that the US Fed could remove its quantitative easing policy. Batista's assets in Colombia stem mainly from his takeover of Ventana Gold, which owned the La Bodega project, in early 2011 in a transaction that valued the assets at around Cdn$1.5bn (US$1.46bn). A scoping study for La Bodega released in November 2010 estimated average annual production for the first six full years of 301,000oz gold, 1.4Moz silver and 6.9Mlb (3,130t) copper or 347,000oz of gold equivalent. Subsequently AUX added additional properties near La Bodega by buying juniors Galway Resources and Calvista in 2012. Among possible buyers to acquire control in AUX is Abu Dhabi-based state investment fund Mubadala, which recently bought 65% of EBX's mining arm MMX's Sudeste port. According to the report, Batista hired Brazilian and Canadian banks to conduct AUX's sale process. In late-September 2012, The Qatar Investment Fund (QIF) refuted media reports that it was in talks to buy a US$2bn stake in AUX.