Atlantic has announced a complex series of deals worth more than $76 million to buy Mineral Resources out of the Windimurra Vanadium project and acquire the mothballed project's beneficiation plant.
Atlantic has announced a complex series of deals worth more than $76 million to buy Mineral Resources out of the Windimurra Vanadium project and acquire the mothballed project's beneficiation plant.
The proposed deals include Atlantic paying $16 million to acquire MRL's proposed 27.5 per cent interest in Midwest Vanadium Pty Ltd, lifting its stake in the project company to 90 per cent.
MVPL, which owns 100 per cent of the project, will also pay $60 million to MRL to acquire the project's beneficiation plant.
MRL has announced that it will be repaid all outstanding debts totalling approximately $20 million upon financial close, expected in mid to late August 2010.
Atlantic, headed by Michael Minosora, said it would proceed with a previously announced $55 million capital raising, pitched at 4.4 cents per share.
It said the deal would simplify the management of MVPL under one group, simplify the shareholding structure of MVPL, enhance the attractiveness of the project to financiers, and improve the operation of the project.
An MRL statement is pasted below:
MINERAL RESOURCES AND ATLANTIC RESTRUCTURE WINDIMURRA VANADIUM PROJECT
Mineral Resources Limited is pleased to announce it has agreed to vary the original agreement between Atlantic Ltd (ASX:ATI; Atlantic) and the Receivers of MVPL in respect of the acquisition of the Windimurra vanadium project (Project).
Under the revised agreement (which is subject to the approval of the existing lenders):
1. MRL will sell its 27.5% interest in the Project to Atlantic;
2. MRL will be paid all outstanding debts totalling approximately $20 million upon Financial Close expected in mid to late August 2010.
3. MRL will sell its existing BOOT plant into the Project with settlement to occur on or before 1 April 2011, and
4. MRL will be paid all monthly BOOT payments that accrue between Financial Close and completion of the BOOT plant sale.
Peter Wade, Managing Director of MRL said that the revised agreement provides MRL shareholders with an appropriate return for the capital held in the Project since MVPL went into receivership in February 2009 and provides for full repayment of past debts and accrued capital payments through to settlement of plant purchase. The new structure provides certainty of outcome for MRL shareholders and also has the potential of providing MVPL's new shareholders with a positive return into the future.
Atlantic will obtain all necessary finance to complete construction and commissioning of the refinery plant, undertake completion of the plant construction, maintain full control of the operational aspects of the Project and take responsibility for the successful performance of the mine and processing operations.
"MRL stood by the Windimurra project through extremely challenging economic times. Our commitment in doing so enabled the Receivers of MVPL to secure new investors and thereby give existing secured lenders to the Project the best opportunity to achieve an improved debt recovery outcome."
"The Board of MRL considers that its exit from the Windimurra Project insulates MRL shareholders from the historically volatile vanadium market and importantly enables the cashflow generated from this transaction to be reinvested into our portfolio of well advanced iron ore and manganese producing projects and further expedites the development of other projects into production.
In the current tight skilled labour market, it also enables MRL to utilise its specialist construction and project management personnel on projects for which anticipated greater project returns can be achieved."
"The Windimurra project will acquire a world class upfront beneficiation plant at a very competitive cost. This acquisition enables MVPL to own and manage the entire processing infrastructure from mine to product which should generate considerable potential for operational synergies." said Mr Wade.
An Atlantic statement is pasted below:
ATLANTIC TO ACQUIRE 90% INTEREST IN WINDIMURRA VANADIUM PROJECT
Highlights
- Atlantic now to acquire 90% interest in Windimurra vanadium project
- Revised terms deliver significant project and economic benefits to Atlantic
- Amended transaction terms streamline project management and operation
- Shareholder meeting scheduled for 6 August to be adjourned until 13 August
Atlantic Ltd (ASX: ATI; Atlantic) is pleased to announce the signing of a binding term sheet to restructure the transaction with Mineral Resources Limited (MRL) to acquire the Windimurra vanadium project (Project).
In April 2010, Atlantic announced that a consortium of Atlantic and MRL had agreed to work together to acquire an effective 90% equity interest in Midwest Vanadium Pty Ltd (MVPL), the company that holds 100% of the Project.
Under the terms of the revised agreement, Atlantic will acquire the full effective 90% equity interest in MVPL and MVPL will also acquire the existing beneficiation plant at Windimurra owned and operated by MRL.
This revised agreement represents a superior transaction outcome for Atlantic whilst for MRL it fast tracks repayment of its existing unsecured debt position with MVPL.
