Amur Minerals to sell Kun-Manie nickel project for US$105m
, together with its wholly owned subsidiary Irosta Trading, is selling 100% of its interest in Irosta's Russian subsidiary, AO Kun-Manie for US$105 million.
The nickel-copper sulphide mineral exploration and resource development firm entered into a share purchase agreement for the sale of the nickel project in Russia with Stanmix Holding.
The US$105 million price represents premiums of 220% to Amur’s market capitalisation on 6 May 2022 and 330% to the current Kun-Manie book value of $24.4m, as at 30 June 2021.
The proposed transaction will require shareholder approval, the company explained to shareholders this morning - this will be requested at a meeting scheduled on 25 May.
The acquisition will also require the approval by a newly created Russian Federation government commission per Order 81 dated 1 March 2022 which addresses change of control of western held assets, and the consent of Russia’s Federal Antimonopoly Service.
Amur intends to use the proceeds from the initial $15m payment obtained on completion for an acquisition via a reverse takeover within six months while the funds will be used to acquire one or more projects located in “mining friendly jurisdictions.”It is anticipated that portions of the second and third payments totaling US$60m will be paid as dividends to the shareholders.
Robin Young, CEO of Amur, said the acquisition represents a cash consideration of US$75 million over four years “and a further US$30 million over 10 years commencing in 2027.”
He added: “The total consideration represents a 220% premium to the Company's market capitalisation on 5 May 2022 and a 330% premium to the Kun-Manie book value.
Additionally, Amur recently engaged with independent advisers with respect to the valuation of Kun-Manie which indicates that US$105 million is a fair and reasonable price for the project.”
Stanmix is a firm controlled by Vladislav Sviblov, a Russian entrepreneur and shareholder in a number of mining and industrial assets, including Highland Gold, one of the largest gold miners in Russia. He has also completed a number of major Russian mining transactions.
Young also highlighted that significant further investment is still required at the Kun-Manie nickel project, including significant expenditure on infrastructure as well as access roads.
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