27/02/2019 - 13:17

Nzuri receives $110m Chinese takeover offer

27/02/2019 - 13:17

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China-based Chengtun Mining has launched an all-cash bid to buy Nzuri Copper at 37 cents per share.

Nzuri receives $110m Chinese takeover offer
Nzuri’s focus is on its 85 per cent-owned Kalongwe copper-cobalt project.

China-based Chengtun Mining has launched an all-cash bid to buy Nzuri Copper at 37 cents per share.

The offer, which values the explorer at $109.5 million, represents a 64 per cent premium to its three-month volume weighted average price of 23 cents per share.

Daglish-based Nzuri’s focus is on its 85 per cent-owned Kalongwe copper-cobalt project in the Democratic Republic of the Congo.

The project hosts a resource of 302,000 tonnes of copper and 42,700t of cobalt. In April 2018, Nzuri said stage one development of Kalongwe would require approximately $74 million.

Chengtun will also provide Nzuri a $5 million secured loan to support its ongoing pre-development activities at the project.

Chengtun recently completed construction on a $209 million solvent extraction and electrowinning processing facility with a cobalt hydroxide circuit in the Kolwezi region of the DRC.

In a statement, Nzuri said the processing facility would have many synergies with its Kalongwe project.

Nzuri managing director Mark Arnesen said that, given the all-cash nature of the offer and the significant premium to Nzuri’s recent trading price, directors recommend that shareholders vote in favour of the proposal.

“While we have made great recent progress towards unlocking a suitable financing solution for Kalongwe – combined with extensive pre-development activities including an extensive front-end engineering and design and hydro-metallurgical test work program – the board believes that this transaction provides shareholders with the opportunity to crystallise certain value for their investment at a time when new development projects in the resource sector face considerable funding hurdles and a range of market related and strategic risks,” Mr Arnesen said.

Bellanhouse Lawyers is Nzuri's legal adviser to the proposal, while Chengun has engaged Gilbert + Tobin to be its legal adviser.

Shares in Nzuri were up 19.23 per cent to trade at $31 cents each at 3pm AEDT.

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