Iluka takeover of Sierra Rutile back on
PERTH (miningweekly.com) – ASX-listed Iluka’s £215-million acquisition of Sierra Rutile is back on track, after fears were allayed over two tailings dams.
Iluka last month warned that the takeover was in jeopardy owing to geotechnical risks at two tailings dams that form part of Sierra Rutile’s operations. The Australian company issued Sierra Rutile a notice of nonfulfillment of the material adverse change condition precedent under the merger implementation agreement.
However, since then, Iluka’s senior operational team carried out further inspections to the dam, and an independent geotechnical consultant was appointed, which confirmed that subject to the lowering of water levels in the containment ponds, the risk of immediate failure to the dams was low.
The water levels in the containment ponds have now been lowered to an acceptable level, and Iluka told shareholders on Wednesday that the company had developed plans for dam management, including wall construction techniques, linings, maintenance and operating and monitoring regimes.
The independent consultant has confirmed that the plans are "appropriate".
Iluka noted that, where operational improvements were warranted to meet the company’s standards, these would be implemented post the completion of the transaction.
With this in mind, Iluka said it expected the acquisition to be completed.
The two companies have agreed that all conditions precedent to the transaction have been satisfied, and the merger would become effective on December 8.
The acquisition of Sierra Rutile will enhance Iluka's rutile portfolio position and sits alongside its existing position as the largest global zircon producer.
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