Stellar Diamonds agrees to be swallowed by Australian rival 

Aim-listed Stellar Diamonds has recommended a takeover bid by Australian rival Newfield Resources, warning it may not have sufficient funds to continue without the deal.
The mining minnow has struggled in recent years to raise enough money to finance its Tongo-Tonguma project in Sierra Leone.
The all-share takeover by the ASX-listed company offers 0.76 Newfield shares for each Stellar share, valuing the diamond miner at ?7.74m.
The companies estimate this is a premium of around 154pc to Stellar’s share price of 4.9p shortly before news of the deal broke in February. Stellar shareholders will hold around 16.5pc of the enlarged company.
Stellar's shares jumped again on confirmation of the deal, up 49pc to 7.3p.
The deal is dependent on Newfield tapping its major investors in Australia to raise A$30m (?16.9m) that will go towards funding the Tongo-Tonguma mine.
Stellar chief executive Karl Smithson, who will join the Newfields board after the deal, said: “This a very neat solution for us and our shareholders. We’re able to bring money in at a significant premium. The project itself is ready for development and within 12 months we’ll be in production.”
Stellar Diamonds agrees to be swallowed by Australian rival 

Sierra Leone is in the middle of presidential elections
Mr Smithson said that a flat diamond market and worries about Sierra Leone as a stable jurisdiction had made it hard to attract investors to Stellar. But Newfield was “comfortable with the territory”, holding four licences in nearby areas and in neighbouring Liberia.
Stellar sealed a deal to mine on the Tonguma side of its licence just two weeks ago. The Tonguma licence is owned by Octea, a company that is in turn owned by BSG Resources, the controversial mining group controlled by Israeli magnate Beny Steinmetz. BSGR went into administration last week, but Octea’s operations are unaffected.
Mr Steinmetz is under investigation by authorities in three different countries in relation to mining deals in other parts of West Africa. He has denied any wrongdoing.
Mr Smithson said the Steinmetz group had no control over the Tonguma project, although Octea will receive a 9.3pc royalty on any revenues it raises.
See also:
Leave a comment
  • Latest
  • Read
  • Commented
Calendar Content
«    Март 2018    »