Base in $US75m African purchase

Base Resources has announced that it will purchase a mineral sands project in Madagascar for $US75 million ($100 million) and tap investors for $100 million to fund the acquisition.

Under the agreement, the mineral sands miner will initially take an 85 per cent stake in the Toliara sands project, with the remaining 15 per cent to be acquired from World Titane Holdings for $US17 million pending the achievement of key milestones.

The project is underpinned by the Ranobe deposit which has a JORC 2012 resource of 857 million tonnes at 6.2 per cent heavy mineral, including 612 million tonnes at 6.7 per cent heavy mineral.

Base said the project could be in production in mid-2021.

Managing director Tim Carstens said World Titane had invested significantly in developing the project.

“This is a transformational acquisition for Base Resources and represents a significant step in execution of the company’s strategic plan,” he said.

World Titane chairman Carlo Baravelle said the company was pleased to have concluded the transaction with Base.

In order to fund the acquisition the company has also announced that it will raise $100 million, comprising a partially underwritten $36.5 million institutional placement and a $63.5 million entitlement offer.

The acquisition is conditional on Base raising a minimum of $80 million through the offer.

Under the placement the company will issue shares at 25.5 cents each, representing a 15 per cent discount to the 10-day volume-weighted average price.

The one for three accelerated pro rata entitlement offer has two components, which include an accelerated entitlement offer to institutional shareholders and an entitlement offer to retail shareholders.

RFC Ambrian has been appointed as offer manager while Numis Securities Limited has been appointed as joint manager to the offer.