Copper miner Kagara says it will vote against Copper Strike's proposedjoint venture development of the Einasleigh copper-gold-silver project in North Queensland with Chinese partners.
Kagara, which is Copper Strike's largest shareholder with a stake of 17.5 per cent, said it could not support a proposed transaction with Beijing Jintai Yuanchung Mining (Jintai) and Taifeng Yuanchung International Development Group because it would not deliver near-term value or certainty that the Einasleigh project will be developed.
Earlier this year, Copper Strike asked its shareholders to reject an 11 cents per share takeover bid from Kagara in favour of a joint venture development at Einasleigh, under which Jintai and Taifeng agreed to invest $5.8 million for a 19.9 per cent stake in the company, with an option to take another 13 per cent, for $5.6 million.
Taifeng also agreed to jointly develop the Einasleigh project with Copper Strike, if its bankable feasibility study confirms current resource, production and development cost estimates.
Under a farm-in agreement, Taifeng would invest 95 million for a 75 per cent interest in the Einasleigh tenements, and also furnish Copper Strike with a $5 million loan.
"Kagara does not believe that this is a palatable situation for Copper Strike shareholders, who may have little or no bearing on the development decisions of Jintai and Taifeng in relation to the Einasleigh project," Kagara's statement said.
Kagara also said it was concerned over the funding arrangements of Jintai And Taifeng.