JOHANNESBURG (miningweekly.com) – Vancouver-based First Quantum has agreed to buy Zambia-focused explorer Kiwara in a deal worth $260-million.
The LSE- and TSX-listed First Quantum, which owns copper operations in Zambia, the Democratic Republic of Congo and Mauritania, said in a statement on Monday that it would acquire Kiwara in a share and cash deal.
Kiwara shareholders would receive 0,0085 First Quantum shares and £0,375 for every Kiwara share held. The implied value of the purchase price was £0,75 for each Kiwara share, based on an agreed market price of £43,68 for one First Quantum share on the LSE.
The transaction would result in the issuance of about 1,8-million new First Quantum shares.
The Aim- and JSE-listed Kiwara’s shares surged 22% on the London bourse on Monday, rising to 65p a share from Friday’s closing price of 53p a share.
Kiwara said that its board considered the offer as fair and reasonable and unanimously recommended that shareholder vote in favour of the offer.
Moore Stephens Corporate Finance was acting as an independent expert to advise the Kiwara board on the fairness of the offer. Its opinion would be disclosed to Kiwara shareholders in due course, it stated.
Kiwara chairperson Colin Bird said that the transaction with First Quantum would put its Kalumbila project, in Zambia, in the hands of a management team with a track record to implement major projects on time and to specification.
“Kiwara has recognised that the Kalumbila project and indeed the licence area in general, has potential well in excess of our current resource capability,” he explained.
First Quantum chairperson Philip Pascall said that the deal with Kiwara was in line with its strategy of acquiring projects to which the company could add value by applying its technical expertise.
“We believe our many years of successful operations in the Copperbelt and Zambia in particular will be beneficial in the development and eventual operation of the new assets,” he added.
A shareholder meeting to approve the scheme arrangement would be held in early January, while the High Court of England and Wales’ hearing to sanction the scheme was expected be held on January 28, and subject to the satisfaction or waiver of conditions, the scheme was expected to become effective by January 29.