Xinhua reported that Chinese mining firm Jinchuan has acquired 70% stake in Tiomin Kenya Limited in a bid to revive the titanium mining project located in Kenya's coastal region.
A statement from the Canadian based mining firm Tiomin received said that Jinchuan acquired the controlling equity interest in Tiomin Kenya a wholly owned subsidiary of Tiomin that owns 100% of the Kwale Mineral Sands Project in Kenya.
The investment agreement which was signed on September 2nd 3009 offers Jinchuan a 70% stake in Tiomin Kenya Limited leaving the Canadian parent with 30%. Jinchuan is expected to immediately invest USD 25 million into the mining project to offer it the financial muscle it needs to take off.
The statement said that "Tiomin Resources is pleased to announce that it has taken a significant step forward and signed an Investment Agreement with Jinchuan Group Limited.”
The Canadian and Chinese firms hope to mine an average of 330,000 tonnes of titanium bearing limonite, 77,000 tonnes of rutile and 37,000 tonnes of zircon a year from the Kwale Mineral Sands site.
The statement said that all net cash flow generated by Kwale will be used initially to repay project debt and thereafter net free cash flow will be distributed pro rata 70% to Jinchuan and 30% to Tiomin. It said that "The transaction is expected to close in about 2 months and is subject to regulatory and shareholder approval."
Mr Robert Jackson CEO of Tiomin said that "Closing this flagship deal which has had such a long and painful gestation period will be a key event for Tiomin. We believe that the closing conditions can be met in the next 2 months."
He said that 30% carried interest in a good project for no further investment is highly valuable to Tiomin particularly given the potential upside of higher commodity prices and exploration success.
Mr Jackson said that "Investors should look at this transaction in the context of the enormous benefit to Tiomin of Jinchuan's ability to obtain project financing to construct the project."
He said that "In addition closing this transaction with Jinchuan will give Tiomin more flexibility to pursue its strategy of leveraging its strong cash position and management team to find and execute an accretive company making transaction."
(Sourced from http://www.steelguru.com/news/index/2009/09/07/MTEwNjMx/Jinchuan_acquires_70pct_stake_in_Kenya_titanium_mines.html
Monday, September 7, 2009
Jinchuan acquires 70pct stake in Kenya titanium mines
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