23/12/2014 - 14:53

Base bids for second project

23/12/2014 - 14:53

Bookmark

Save articles for future reference.

Perth-based Mineral sands miner Base Resources has launched a scrip takeover offer for ASX-listed World Titanium Resources, which owns the Toliara Sands project in Madagascar, after securing extra funds for its Kwale project.

Base bids for second project

Perth-based Mineral sands miner Base Resources has launched a scrip takeover offer for ASX-listed World Titanium Resources, which owns the Toliara Sands project in Madagascar, after securing extra funds for its Kwale project.

Base is offering one of its shares for every five World Titanium shares, valuing the target at 4 cents per share or $14.5 million.

This represents a 60 per cent premium to the closing price of World Titanium shares on the ASX.

The offer is subject to a 40 per cent minimum acceptance.

JP Morgan Asset Management (UK), which holds 7.7 per cent of World Titanium, has entered into a pre-bid acceptance agreement with Base.

Base is likely to have a harder time extracting support from World Titanium’s largest shareholders, Luxembourg-based Boulle Titanium (20.4 per cent) and ASX-listed Mineral Deposits (19.1 per cent).

“Base notes that all four of the directors of World Titanium are representatives of World Titanium’s existing largest shareholders,” the company said in a statement.

“In these circumstances, it has not been practical for Base to engage with the World Titanium board regarding the offer in advance of this announcement.”

Base currently operates the Kwale project in Kenya and is looking to add a second project to its portfolio.

On successful completion of the offer, World Titanium Shareholders would collectively hold approximately 11.4 per cent of Base.

Base managing director Tim Carstens said the Toliara Sands project “is a well-recognised large scale, high grade development opportunity”.

“The success of the Kwale Mineral Sands operation provides a model and platform to bring an additional asset into our portfolio that presents us with a clear growth path in line with our strategy for building a sustainable and globally significant resources company,” he said.

Base’s corporate adviser is RFC Ambrian, its legal adviser is King & Wood Mallesons, and its public relations adviser is Cannings Purple.

ON the funding front, Base said it has executed a US$20 million unsecured debt facility with major shareholder Taurus Funds Management.

The Taurus facility will provide working capital and the funding necessary to deliver up to US$15 million in additional liquidity to the Kwale project.

This commitment was a condition of the recently completed rescheduling of the Kwale project debt facility.

The Taurus facility has a commitment fee of 2% on any undrawn balance; an interest rate of 10% on the drawn balance, and an upfront fee of 2% plus establishment costs.

In addition, Taurus is entitled to 61.4 million unlisted share options, for nil consideration and exercisable at 40 cents.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options