Deals
StratMin Global Resources plc Proposed acquisition of Graphmada Equity Pte. Limited
StratMin Global Resources Plc (AIM: STGR), the AIM quoted natural resource investment company focused on graphite mining and exploration, is pleased to announce the conditional acquisition ("Acquisition") of the remaining 85% of shares in Graphmada Equity Pte Ltd ("Graphmada") not already owned by the Company for a consideration of £25.5 million, to be satisfied through the issue of new ordinary shares in StratMin.
Graphmada
Graphmada is the holding company of Graphmada SARL ("Graphmada Madagascar").
Graphmada Madagascar is a graphite mining company with operations in Madagascar. Global demand for graphite is increasing and natural graphite is scarce. Graphite has growing importance in high technology and green energy applications, and has been declared supply-critical by both the US and the European Union. China, which produces approximately 70% of the world's supply (2011) has recently imposed a 20% duty on all exports.
The Republic of Madagascar hosts some of the highest quality flake graphite deposits in the world. GraphmadaMadagascar holds two exploitation permits located in eastern Madagascar 15 km west of the coast and 20km south west of Brickaville. The permits were issued to by the Bureau du Cadastre Minier de Madagascar.
Exploitation Permit No 26670, referred to as the Loharano Licence, extends over 12.5 sq km. The permit was granted on 21 January 2008 for a period of 40 years. The second exploitation Permit No 24730, known as the Antsirabe Licence, covers an area of 6.25 sq km, and was granted on 5 March 2007 for a period of 40 years.
Resources and production facilities
The Admission Document will include a Competent Persons' Report on Graphmada Madagascar's current main licence area, Loharano 1 (northern block) ("Loharano"), which estimates that the block contains a 5.7 million tonne JORC standard inferred resource and an indicated resource containing an estimated graphite resource of 234,659 tonnes. The Company believes the additional licence areas are highly prospective, providing considerable exploration upside potential.
Graphmada Madagascar has completed the construction of a graphite processing plant at Loharano, where calibration of the production circuit is complete and trial production of graphite at the siteis proceeding. This plant has been designed to produce approximately 12,000 tonnes of processed graphite per annum at full capacity. Stratmin has been working closely with the Graphmada team to meet the proposed development timelines and production objectives.
Acquisition, Placing and Expected Timetable
The Acquisition will constitute a reverse takeover under the AIM Rules for Companies and will therefore be subject to shareholder approval. It is also subject to the successful completion of a conditional placing to raise additional funding for the enlarged group from institutional and other investors, which is being arranged by the Company's brokers. Once the Placing funds have been raised conditionally, a circular in the form of an Admission Document will be published and sent to shareholders, providing further information on Graphmada and the terms of the Acquisition.
Pending the publication of the Admission Document, trading in the Company's shares will be suspended with effect from 7.30 am on 9 November 2012.
Gobind Sahney, Chairman of StratMin, commented "This transaction delivers full ownership and 100% of the upside potential of Graphmada's world-class Madagascan graphite project. We consider this to be a particularly exciting opportunity and look forward to working more closely with Graphmada to realise the potential of this unique asset and maximise shareholder value."
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