Nchanga - North Pit Wall Colapse - Zambian Copperbelt (sitios de interés)
Descripción del sitio
Insurance recovery: on 8 April 2001 the north pit wall at the Nchanga open pit collapsed. KCM subsequently made a claim against its insurers in relation to this incident. At the Relevant Date the liability of the insurers to pay and the amount of any such payment were in dispute.
We have reviewed documentation associated with this claim. In particular, we have been provided with a Memorandum of Meeting authored by Pinsent Masons and dated 4 August 2005. This memorandum notes that "nothing had detracted from PM.s overview that KCM have a good claim and could be awarded a sum in the region, subject to a revision of the quantum, of between US$40 . 50m".
We consider that even an aggressive buyer would have discounted the expected insurance recovery to take account of the time, expense and inherent uncertainty associated with any litigation. There is no objective methodology we can adopt to determine the appropriate level of discount that would have been applied by a purchaser, so we have relied on our judgement and experience to conclude that an aggressive buyer might have factored 50% of the value of the claim into its valuation of KCM. Accordingly, we have included in the cashflow projections an amount of US$22.5m, being 50% of the midpoint of the likely recovery range identified in the Pinsent Masons memorandum
KCM Valuation Report (Rotschild, January 2008)