East Perth-based Metals X will pocket more than $16 million after its largest shareholder, Hong Kong company APAC Resources, agreed to lift its interest to 28.3 per cent.
East Perth-based Metals X will pocket more than $16 million after its largest shareholder, Hong Kong company APAC Resources, agreed to lift its interest to 28.3 per cent.
Metals X said it will place 178 million shares at a discounted nine cents each to APAC, subject to shareholder and regulatory approvals.
The placement follows a deal with China's Yunnan Tin Group which will see Metals X sell an initial 50 per cent of its Tasmanian tin assets for $50 million cash.
Metals X will then form a joint venture with Yunnan to develop those assets.
Shares in Metals X were up 0.5 cents to 11.5c at 13:27 AEST.
The announcement is below:
Metals X Limited ("MLX") advises that it has agreed to an interim funding proposal from its largest shareholder APAC Resources Ltd (HK1104) ("APAC") whereby MLX will make a 15% placement to APAC, subject to shareholder and FIRB approval.
The placement will see APAC increase its shareholding to approximately 28.3% of MLX.
Further, MLX is pleased to advise that with the financial support of APAC as a cornerstone investor it has embarked on a strategy to both grow the company through acquisition and through crystallising the value of its existing assets where appropriate.
This commenced with the previously announced intent to establishment a Joint Venture with the world's largest and most vertically integrated Tin miner, Yunnan Tin Group ("YTG") of China. This deal will see MLX sell YTG an initial 50% of its Tasmanian Tin assets for A$50 million in cash and then work with Yunnan to improve and advance those assets, including strategic opportunities to develop the large Rentails Tailings Re-treatment Project using the proprietary technology and expertise of its new partner.
MLX believes this transaction not only underwrites the value of its Tin Assets but also provides substantial opportunity and potential for growth above what it has been able to achieve on its own as a non-integrated concentrate producer.
The YTG transaction is also subject to FIRB, Chinese Government and Ministerial approvals and is expected to settle by the end of October leaving MLX in a strong financial position.
In the meantime, the funding arrangement via the placement with APAC provides further financial security for MLX to move forward with its strategic plans in the interim.
MLX's Managing Director, Warren Hallam said, "We warmly welcome the backing and continued support of APAC. We will continue to review our diversified portfolio of assets and determine the best way to crystallise the true value of these assets while seeking out additional opportunities to move the company forward to deliver value for our shareholders."
