27/02/2012 - 13:54

Equatorial accepts $65m offer for African Iron stake

27/02/2012 - 13:54

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Equatorial accepts $65m offer for African Iron stake
Drilling at African Iron's Mayoko-Lekoumou iron ore project in the Congo.

Equatorial Resources has accepted South African miner Exxaro’s $65 million offer to purchase its 20.5 per cent stake in takeover target African Iron.

Equatorial said its cash holding would increase to more than $90 million following receipt of the considerations from Exxaro.

Once Equatorial’s acceptance is received, Exxaro will hold more than 75 per cent of African Iron’s shares, giving share and option-holders who have already accepted the offer an additional payment of 6 cents per share.

African Iron holds a 92 per cent interest in the Mayoko-Lekoumou iron ore project, adjacent to Equatorial’s Mayoko-Moussondiji iron project in the Democratic Republic of Congo.

Equatorial said the two projects had the potential to be developed over a similar timeline, with significant opportunities for “development synergies”.

Equatorial managing director John Welborn said Exxaro’s potential to accelerate investment in regional infrastructure was extremely positive for the region.

“Our discussions to date with Exxaro have given us confidence that we can collaborate in developing our neighbouring projects for mutual benefit,” Mr Welborn said in a statement.

“Exxaro share our enthusiasm to accelerate development and their experience and expertise will be a positive addition to the region.

“Equatorial will have more than $90 million cash which will allow us to continue our aggressive exploration and development programs at both of our 100 per cent owned iron projects in the Republic of Congo.”

At close of trade, Equatorial stocks were down 1.2 per cent, trading at $2.45. 

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