PERTH (miningweekly.com) − ASX-listed minerals explorer Fortis Mining has paid its first installment of $6-million to secure the rights to buy two potash projects in Kazakhstan, for $260-million.
Last month, Fortis signed a heads of agreement to acquire a 75% shareholding in Hong Kong-based Ji’ian Resources Investment, which has the right to the shares of Panamanian company Wiyot SA.
Wiyot SA owns a 95% shareholding in Bates Potash Company, which holds 100% of the proprietary and legal rights to the two Kazakhstan potash assets.
The potash transaction was broken down into two different transactions, with Fortis paying Ji’ian 40-million of its own shares, as well as A$1-million in cash, and paying Wiyot SA $260-million for the two potash tenements.
The $260-million would be payable in three installments, with the first $6-million now being paid.
A second payment of $24-million was due on April 18, with a further $230-million due on July 7.
Fortis said it was considering a variety of funding options available to pay the second and third installments. These options included using an existing equity facility, debt financing, or raising funds through issuing up to 100-million shares to the market.
The Chelkar and Zhilyanskoe deposits are located in western Kazakhstan, and were well positioned to serve the largest Asian potash markets, with one mine situated just 14 km from the national rail link to China.
Ji’ian Resources is currently undertaking drilling activities at both project areas, and is working with both historical and new data to advance the project.
Fortis said its representatives recently visited the project areas in order to undertake an investigation of the legal and technical data available, and to meet with representatives from the vendors as well as the government.
Fortis said at this stage, the company remained confident at the progress of its due diligence enquiries.
The ASX-listed company has also appointed an independent expert to review both deposits and submit an opinion to the board, ahead of the next payment, on April 18.
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