The independent committee of the controversial miner, which is currently under investigation by the Serious Fraud Office, said the consortium's proposal was 175p in cash and 0.231 Kazakhmys shares, valuing each ENRC share at 260p.

The committee repeated its view that the offer materially undervalued the copper miner, though it noted the consortium had until 3 June to make a revised offer.

The Kazakh-based consortium comprises ENRC’s three co-founders (who each own over 14% of ENRC), copper group Kazakhmys with 26%, and the Kazakhstan government.

The committee said: "We believe the current proposal materially undervalues ENRC and we will use the extension to seek an improved and formal proposal.

“The independent committee is committed to serving the best interests of minority shareholders through a professional, transparent and rigorous process, which incorporates the highest standards and principles of independence and integrity."

Shares fell 3% today to 263.2p.

Deutsche Bank and Morgan Stanley, which have guided the company since its arrival on the London Stock Exchange in 2007, have quit as ENRC’s brokers, according to Sky News.

The Kazakh miner is currently the subject of an investigation by the Serious Fraud Office (SFO) into allegations of corruption.

A recent boardroom bust-up led to the departure of chairman Mehmet Dalman, who was in charge of a probe into the corruption allegations. He had warned executives he would quit over issues of transparency.

His exit added to the long list of ENRC executives to call it a day in April, including its group financial controller and chief commercial officer.

Chief executive Felix Vulis said on Thursday the company is keen to get to the bottom of the allegations.

“I want to stress that ENRC is committed to a full and transparent investigation of both procedures and conduct and that we are co-operating fully in the reporting process with the SFO,” he said.

“The board is fundamentally aware of and accepts the extra scrutiny that the company faces…when all the noise and hyperbole is stripped away in the course of the investigation, we will be able to demonstrate that we have applied responsive and responsible procedures.”

ENRC is controlled by its three co-founders, who own over 14% each, plus copper producer Kazakhmys, with a 26% stake, and the government of Kazakhstan.

Last month its co-founders said they were, along with the Kazakh government, sizing up a takeover bid for the company.

Vulis responded to the bid talk by saying: “All we know now is what we knew then, that there can be no certainty that an offer will ultimately be made for ENRC, nor the terms on which any offer might be made.”

His comments come as ENRC revealed first quarter iron ore production was hit by “severe” weather.

Revenue decreased slightly against the first quarter of 2012 due to weaker commodity prices, while cost inflation was in line with guidance.

Shares slumped 5.2% to 287p each.

Iron ore production was affected by "severe" weather during the three months to March 31 but elsewhere production was at full available capacity.

Revenue decreased slightly against the first quarter of 2012 due to weaker commodity prices, while cost inflation was in line with guidance, the Kazakh miner said.

Its copper Frontier mine in the Democratic Republic of Congo is ramping up to steady production and full milling capacity is expected in July this year, it added.

Chief executive Felix Vulis told investors: "I am pleased with the group's recent operational performance, which is a reminder of the underlying strength of the business.

"The ferroalloys division produced at full available capacity, volumes were included for the full quarter from Shubarkol and alumina production has recovered well."

He added: "As a management team our focus continues to be on the development of our key growth projects, management of cost inflation and maximising production volumes from our world class asset base."

On the potential takeover offer, the firm repeated it had not received any proposal which could result in an offer or possible offer.

ENRC shares dipped 0.76% to 310.10p.

The chairman of ENRC (LON:ENRC) has quit, throwing the already troubled Kazakh miner into fresh disarray.

Former investment banker Mehmet Dalman has been replaced by Gerhard Ammann, a non-executive director of the company and former head of auditing firm Deloitte.

Dalman was hired 14 months ago to sort out the mess at ENRC amid a stand-off between directors and its co-founding shareholders.

He had been leading a probe into allegations of corruption and warned executives he would quit over a spat about transparency.

His departure adds to the long list of ENRC executives to have called it a day in April, including its group financial controller and chief commercial officer.

“I have a clear mandate from the board,” said new chairman Gerhard Ammann. “My role is to work efficiently with internal and external stakeholders to draw a line under the past, allowing the true potential of the group's excellent asset base to be realised and contribute to a more appropriate valuation.”

ENRC is controlled by its three co-founders, who own over 14% each, plus copper producer Kazakhmys, with a 26% stake, and the government of Kazakhstan.

It was revealed on Friday that its co-founders were, along with the Kazakh government, sizing up a takeover bid for the company. Shares in ENRC and Kazakhmys soared on the news.

Shares in ENRC rose 4% to 293p today.

ENRC (LON:ENRC) is reportedly the subject of a takeover bid from a consortium made up of the Kazakh miner’s three founders and the government.

Together the members, including reclusive Russian billionaire Alexander Machkevitch, already own more than 55% of the company.

Machkevitch, who has a 14.6% stake, said he is weighing up his options, as well as a full takeover of the company with fellow founders Alijan Ibragimov, Patokh Chodiev and the Kazakh government.

Shares leapt by more than a quarter to 292p each, despite Machkevitch insisting that it is too early to say whether they will table a bid.

It is as yet unknown what Kazakhmys, ENRC’s largest shareholder at 26%, plans to do with its stake. Its shares also rose 22% to 379p.

ENRC’s shares have been under intense pressure over the past year with the share price down by half amid fears over growth in China, the world’s largest importer of metals.

The miner has until January 2014 to boost its free float, which is currently less than 20%, or quit the FTSE 100.

That’s the view of German broker Deutsche Bank, which was one of the few that said its third quarter production results made for good reading yesterday.

The broker keeps its ‘buy’ rating based on the valuation, but lowers its target price to 720p from 900p after cutting its earnings expectations on the upwardly revised tax guidance, lower than expected production and ongoing decline in the received ferrochrome price.

“While these are clearly not positive outcomes, the company now appears to have an achievable rather than aspirational plan,” analyst Rob Clifford added.

The delay of the Brazilian iron ore projects and energy project lowers his valuation, but he believes the lack of strategic direction had already dragged the share price down.

In the update, ENRC said production was broadly in line with the previous quarter.

However, the big news was that it is spending US$4.4 bln on five projects over the next five years – three copper, one chrome and one iron ore.

Citi analyst Thomas O’Hara has also reduced his target price for ENRC to 400 pence per share from 570 pence - which still represents a premium to yesterday’s closing price of 370.2 pence – on the back of its earnings downgrade.

“We believe the long-term value uplift story has weakened, possibly only temporarily, but sufficiently for us to remove our Buy rating,” said analyst Thomas O’Hara.

“Until we get further clarity on the group’s growth strategy then we see limited catalysts for the stock, as it faces rising costs, creeping debt and negative earnings momentum.”

Earnings forecasts for this year and 2013 were slashed by 12 and 15 percent to 68 US cents and 81 cents respectively, reflecting lower iron ore prices, higher costs in the copper division and higher than expected debt.

According to O’Hara, debt, which currently stands at US$3.4 billion – above the consensus projection of US$2.9 billion 0- is likely to increase further by the end of the year due to further cash payments including US$101.5 million for the Frontier mining licence.

However, he disagreed with the view that ENRC could need a rights issue to shore up its balance sheet. The analyst noted that the group has undrawn credit facilities of US$1.5 billion and a further US$1.5 billion in the bank, which should cover the remaining third of its US$2.3 billion capex.

Investment bank UBS has reduced its target price for Eurasian Natural Resources Corp (LON:ENRC) by 3 percent to 565 pence after  an interim results report that was slightly below consensus estimates.

The stock lost more than 10 percent from a level of just over 420 pence after the results statement yesterday, and by 2.45 pm today was trading down a further 1.87 percent at 372.50 pence.

The Kazakhstan-focused company reported a 19 percent drop in revenues from the previous first half to US$3,246 million, while pretax profit fell to US$667 million from US$1.667 billion a year earlier.

While it expects to produce at capacity in the second half, ENRC does not expect ferrochrome /iron ore prices to recover before the end of the current year.

UBS analyst Myles Allsop noted that the group is still considering its options to unlock value from its portfolio. He expects projects of a total capex value of US$5 billion to be deferred, and international assets to be demerged.

He reiterated his ‘buy’ rating for the group.

Allsop believes the share price reaction was overdone, and that a restructuring is likely this year.

The broker today downgraded the stock to ‘underperform’ from ‘sector perform’ and cut its price target by 30 per cent to 550p.

Falling sales prices and rising costs are taking their toll on ENRC, according to analyst Timothy Huff.

“We are expecting continued price discount pressure at ENRC on its ferrochrome sales (particularly from China) and its iron ore sales (particularly from Russia),” Huff said in a note to clients.

“We also expect to see continued cost inflation at ENRC possibly at the top end of the 15-20% per annum range going forward.”

“However, still our biggest near term concern at ENRC is the increased capex spend on projects such as Brazilian iron ore that will further raise the debt burden in coming years.”

Eurasian Natural Resources (LON:ENRC) said higher energy, raw materials and labour costs reduced its profitability in 2011 despite an increase in revenues.

The Kazakh mining group saw its revenues climb 16.7 percent to US$7.7 billion last year as high-carbon ferrochrome sales reached a record level and the group’s alumina and aluminium and energy divisions produced at full available capacity.

However, pre-tax profits declined 7.5 percent to US$2.75 billion as cost of sales jumped 24 percent to US$3.52 billion.

"2011 has been a year of considerable progress for ENRC. While delivering a sound operational and financial performance, the on-going development of assets across our portfolio has been a key focus of management,” said chief executive of ENRC Felix Vulis.

During the year, ENRC spent US$1.9 billion on the development of its key projects including the Aktobe ferroalloys plant; capex is set to increase to a record US$2.7 billion this year, while production is set to be at full capacity across all divisions.

In 2012, ENRC’s capital expenditure is expected to reach a record US$2.7 billion, while production is expected at full capacity across all divisions.

Shares in ENRC dropped 1.5 percent to 653 pence as the results undershot forecasts. Broker Numis expected the group to post earnings per share of US$1.60 and a net profit after tax of  US$2.07 billion, while the actual figures came in at US$1.53 and US$1.97 billion respectively.

Numis analyst Andy Davidson also drew attention to the group’s cautious outlook for 2012, which said pricing uncertainty and cost pressures are likely to persist, although ENRC said it will “make every effort” to continue to focus on cost savings. 

Davidson said ENRC appears to be "putting its skeletons behind it", referring to last year's boardroom turmoil, and getting on with its business, but "struggling to gain traction in a difficult market".

The analyst said he was now waiting for news of the ENRC’s board restructuring. “While the lack of detail on this process is slightly disappointing to us, the comments suggest that a successful conclusion to the Board restructuring is expected," Wood said.

He added: “a successful Board restructuring will act as a catalyst for a re-rating of the shares and expect that this could be made in the next month.”

Eurasian Natural Resources Corporation (LON:ENRC) remains a ‘buy’ for broker Citi despite recent boardroom turmoil and a recent softening of the spot price for ferrochrome denting earnings projections. 

The broker says that while weakening of the spot price for ferrochrome – an alloy of chromium and iron and a key business for ENRC – has led to a 5% downgrade in its 2011 earnings for the group, this has had little impact on its valuation for the stock or its 2012-2013 forecast. 

Indeed its 2013 earnings projection has increased a little on better recovery assumptions for  the group’s copper operations where oxide production and plant are being upgraded.

The broker, furthermore, argues that ENRC’s share price of 744p (as at 21 June) implies zero growth for the company. Even this scenario, however, suggests a valuation of 900p for the shares. 

The recent high profile boardroom row which led to the acrimonious departure of a number of board directors, including Sir Richard Sykes, has clearly undermined sentiment over the stock. 

Citi analysts say that while the market’s penalising of the company on the quality of its corporate governance is certainly “fair”, the stripping of value away from the company’s growth, as reflected by the shareprice, is ‘unfair’. 

Citi believes there are a few catalysts that could reignite investor interest in the shares. The asset catalysts include completion of feasibility studies and increased disclosure on the group's plans for expanding operations in Brazil and Africa expansion. Meanwhile, a corporate governance review should affirm compliance with the FSA’s combined code and stabilise the share price.

The broker argues that volume growth remains at the heart ENRC’s equity story. It is currently forecasting 74% copper equivalent volume growth for the group from 2012 to 2015, mainly in ferroalloys and iron ore. For copper itself it reckons there is some upside to its forecasts – it is currently assuming little volume on this front. 

Late morning Eurasia shares were down 17.75p to 714.75p.

Goldman Sachs this morning initiated coverage of Eurasian Natural Resources (LON:ENRC) with a buy recommendation and 1,110 pence a share price target.

The broker has also added the stock to its pan-European buy-list, which consists of a small selection of shares it expects to significantly outperform the market.

The ultra-bullish valuation suggests investors could make a more than 50 per cent return buying now. At 9 am ENRC was trading 12 pence higher at 728 pence.

The source of the opportunity, according to Goldman, is the company’s exposure to “tight or pro-cyclical commodities” such as iron, stainless steel, aluminum and copper. 

Analyst Yulia Chekunaeva  expects the results of a corporate governance review to buoy confidence in the stock, which will be helped by positive news flow from green field projects in Africa, which should help drive top-line growth.

“We believe that ENRC’s exposure to tight and or pro-cyclical commodities, a regional sales skew towards BRICs and low production costs strongly position the company to benefit from the pickup in global growth that our economists expect and strengthening commodities momentum,” Goldman mining expert added. 

“Since the beginning of the year, the stock has underperformed its commodities basket and the MSCI EMEA by 35 per cent. 

“We believe this provides an attractive entry point to gain exposure to long-term commodities growth.”

ENRC was in the business headlines last week as the rumour mill suggested it was a takeover target of commodities trader Glencore.

Glencore went on record as saying it wasn’t interested in doing a deal imminently, which prevents it from bidding for six months, but stopped short of ruling out a takeover at a later date.

This morning Sykes, a renowned City operator, called on ENRC shareholders to sell their shares as soon as they get the opportunity. In an interview in the Daily Mail, Sykes desribed the company's founders, a group of oligarchs who still own a majority stake,  as 'mad'.

Meanwhile in a note to clients, JP Morgan Cazenove analyst Amos Fletcher said: “The company has now lost two CEOs, one CFO, one chairman and four NEDs since listing in December 2007 – in our view, a concerning level of turnover for any outside investor regarding the levels of influence of the core shareholders have over the company. 

“We see little chance of these concerns being addressed soon, with a three month review of corporate governance underway which is likely to lead to further board changes.” 

ENRC shares have fallen 27 percent since the turn of the year, dropping over 300 pence from £11.00 in January to around 800 pence a share today.

However the JP Morgan analyst highlights that ferrochrome prices are still falling and there is room for ENRC shares to fall further.

Fletcher added: “While it is tempting to wonder how much worse things can get, we believe consensus numbers need to decline further, to a level closer to our estimate which sits 14 percent below consensus. 

“With the stock still trading at a premium to Rio, Anglo and BHP, we feel there is no valuation case yet while the company continues to suffer from minimal volume growth for the next two years and high exposure to ferrochrome which remains in medium-term oversupply.”

The analyst also pointed out that its ‘not inconceivable’ that ENRC’s founders could take the business private, particularly given that the listed minority of the shares is worth only US$3.5 billion.

“ENRC is carrying very low gearing and the constraints of a UK main board listing are clearly frustrating the founder shareholders,” the analyst said. 

JP Morgan Cazenove has an ‘underweight’ rating on ENRC, which broadly translates to ‘sell’. The bank’s target price is set at 900 pence.

With a more positive outlook, analysts at Moscow-based investment bank Renaissance Capital point out ENRC’s view that its board is simply too big. “ENRC maintains that it had an overly large board at the time of listing, comprising 14 members and including seven independent non-executive directors,” RenCap said.

RenCap rates ENRC as a ‘buy’ with a £12.56 price target.

Johannesburg-listed Mvelaphanda Resources has announced the sale of part of 62.8%-held Johannesburg-listed Northam, a leading Tier II platinum group metal (PGM) miner, to Kazakhstan-based, London-listed ENRC, one of the world's Top 20 miners, by market value.

Mvela Resources will sell 44m shares in Northam, equal to 12.2% of Northam's issued shares, at ZAR 50.00 a share, equal to ZAR 2.2bn (about USD 296m), leaving Mvela Resources with 50.5% of Northam.

The deal will facilitate the paying down of debt at Mvela Resources, and pave the way to collapsing its pyramid structure, and the unbundling of its Northam shares to shareholders. For ENRC, the deal marks a foothold in a story that represents the development of Northam's Booysendal, one of the world's more significant PGM (platinum group metal) deposits.

Strategically, the deal is significant to ENRC, enhancing its status as the one of the world's leading miners of chrome, treated as a waste product for decades by PGM miners in southern Africa, which hosts around three quarters of the world's PGM reserves.

In February 2010 Northam announced its intention to go ahead with the build up to phase I mining of Booysendal, but remained constrained by the debt position at Mvela Resources, a black economic empowerment company which had accumulated relatively significant debt in acquiring its stake in Northam, and also a material stake in Johannesburg-based global Tier I gold miner Gold Fields.

The bridging loan applicable to the Gold Fields transaction was payable by the end of this month. The deal with ENRC will leave Mvela Resources essentially debt free, and with more than ZAR 3bn worth of Gold Fields stock, which could be monetized as part of the recapitalisation of Northam, which may yet also entail a rights issue.

Felix J Vulis, CEO of ENRC, said that the purchase of the interest in Northam "is in line with our stated strategy of diversifying ENRC's commodity portfolio and its geographic exposure. The interest in Northam is a strategic opportunity to invest in one of the largest PGM miners in the world at a time when platinum is expected to benefit from increased demand and to face supply constraints".

ENRC recently paid USD 1bn in cash for Camec, which was listed in London, not least for its holding of the Bougai platinum deposit in Zimbabwe. Northam has approved an early works programme of ZAR 340m for Booysendal, part of a mine build budget of some ZAR 3bn (about USD 400m) aimed at producing an annualised 130,000 ounces of PGMs by 2013.

A second module at Northam, which may only be considered in several years, would also cost about ZAR 3bn in today's money, with an additional ZAR 1bn needed to expand Northam's existing smelter capacity.  Outside the Big Three, Northam stands along in its ownership of a working smelter. Module I mining at Booysendal would be shallow for at least 30 years, over an initial target area measuring some 7.5km by 2km, on an overall resource that contains 103m ounces of 4Es (platinum, palladium, rhodium and gold).

PGM miners have rebounded strongly as metal prices for the group troughed out early in 2009. At the Tier I level, only Impala Platinum has managed a "continuous", albeit lower, flow of dividends, since PGM prices peaked out in March 2008. Anglo Platinum, the world's No 1 name in PGM mining, recently announced a USD 1.6bn rights issue, mainly to repair a traumatized balance sheet. Fellow Tier I PGM miner Lonmin last year was forced into a dilutive rights issue to raise around USD 500m.

Northam has continued to pay dividends, not least in reflection of a strong management team. The return of the PGM sector to profitability has also re-fuelled consolidation themes, which perked up strongly in early 2008. Impala Platinum made and then dropped a bid for Mvela Resources and its subsidiary Northam; global diversified stock Xstrata abandoned a full bid for Lonmin, but held onto 25% acquired.

Other entities that previously expressed an interest in Northam/Booysendal include Xstrata, Lonmin, Alisher Usmanov, and ENRC, which has now secured a leading position in the queue to the bridal suite.

Tier II miner Aquarius was last year forced into a dilutive rights issue, and Anooraq was given substantially easier conditions and financing for assets it acquired from Anglo Platinum. Some full-ready developments have been unable to raise cash from capital or debt markets, as seen in the case of WeSizwe.

The only notable mine build in the past few years has come by way of the Pilanesburg mine, north of Sun City, held by Toronto- and London- and Johannesburg-listed Platmin, with significant support from Pallinghurst Resources.

Kazakhstan based ENRC is more traditionally known for its focus on iron ore, bauxite, ferroalloys and manganese, but has been keen to expand into other metals. In 2009, it bought copper/cobalt mining group CAMEC for £584 million in cash, which gave it a footprint in the Democratic Republic of Congo (DRC).

Chambishi Metals currently owns and operates a copper and cobalt smelting business in Zambia, which has production capacity of 25,000 tonnes per annum of blister grade copper and 6000 tonnes per annum of refined cobalt metal.  ENRC will invest a further $80 million in the production facilities to increase copper cathode production to 55,000 tonnes per annum.  Chambishi will also be integrated into ENRC’s smelting operations in the DRC.

“The acquisition also enables ENRC to fast-track its copper and cobalt expansion and to achieve a higher planned level of combined total capacity, of 130 kt per annum of LME Grade A copper cathode and 12 kt per annum of cobalt contained metal salts and concentrates by 2012,” the company added.

In the statement, Eurasian reported a continued successful control of unit costs and said that it had maintained a strong balance sheet, with gross funds of US$1.9 billion at the end of the period.

Eurasian's business is divided into three divisions: Ferroalloy, Iron Ore and Aluminium.

The company said the recovery in its businesses reflects the company’s cost control measures and an improvement in market conditions. One such improvement is the building momentum in metal pricing which has been buoyed recently due to weakness in the dollar. Eurasian has benefited from increased quarter-on-quarter ‘principle product prices’ in Q3 although prices are still lower than in 2008.

According to Eurasian, revenues in H2 2009 will reflect higher sales volumes and prices. For the remainder of the year the group expects the businesses in Kazakhstan and Tuoli to run at about capacity, group production volumes for full year 2010 are anticipated to be similar to 2008.

The group believes that the industry outlook into 2010 remains uncertain, with the risk of further volatility in volumes and prices. Although Eurasian said that the sustainability of the Chinese economic recovery is now more convincing, while the United States, Europe and Russia are showing signs of stability and even some initial recovery.

Eurasian Natural Resources CEO, Felix Vulis commented on the company’s outlook for the full year: “An economic recovery is now looking more convincing, but we see some uncertainties for the industry into 2010. Management will look to leverage our low cost advantage to sustain production. In addition, we continue to look to develop the Group through capital expenditure and selected acquisitions."

The offer of 20 pence per share for the entire issued and to be issued ordinary share capital of CAMEC represents a 67% premium to its price on 15 July this year, the day before CAMEC said it had received a preliminary approach which may or may not lead to an offer.

The acquisition, which is pending on shareholder approval, would give ENRC access to CAMEC’s copper/cobalt resources in the Democratic Republic of Congo, thus providing entry into copper, which ENRC said had “attractive fundamentals.”

“The attractive assets of CAMEC fit well with our strategic ambition to grow and diversify ENRC. CAMEC offers all of our key requirements including scale and scalable assets, low cost and extensive growth opportunities. We firmly believe that CAMEC offers value accretion for all shareholders,” said ENRC Chief Executive Felix Vilus.

CAMEC reported profits of £54 million for the year ended 31 March 2008, possessing £800 million worth of assets with cash reserves of £17.8 million.

The company’s directors unanimously recommended the shareholders to accept the offer, saying the valuation was fair and that ENRC’s financial and operational resources would help CAMEC develop its asset portfolio.

The announcement helped ENRC to a 1.8% climb on the London Stock Exchange, while CAMEC rallied 7.5%.

“ENRC confirms that it is currently in advanced discussions with CAMEC regarding a potential offer for CAMEC. However, whilst ENRC is engaged in such discussions and is assessing the merits of a potential transaction, there can be no certainty that any such transaction will proceed,” ENRC stated this afternoon in London.

ENRC went even further, stating that if an offer is made, it would be at a price of 20 pence per, in cash.

CAMEC most prized asset are its copper and cobalt operations are in the Democratic Republic of Congo (‘DRC’), though it also has interests in coal, platinum, fluorspar and bauxite across Africa.

Eurasian Natural Resources Corporation is a member of the FTSE 100, and is a a diversified natural resources group with integrated mining, processing, energy, logistical and marketing operations with particular strengths in bauxite, iron ore, coal, chrome, aluminum and power generation primarily situated in Kazakhstan.

ENRC has a market capitalisation of £11 billion compared to CAMEC’s £540 million valuation (19 pence).