Toronto-listed miner Tiomin Resources and Jinchuan Group, of China, have entered into a memorandum of understanding to finance and expedite the development of the Kwale mineral-sands project in Kenya.

Jinchuan is investing about C$10,9-million in Tiomin by acquiring 72 521 134 common shares of the company at C$0,15 a share.



This investment significantly strengthens Tiomin’s cash position to about C$32-million and increases Jinchuan’s equity ownership of Tiomin to 20%. Tiomin has granted Jinchuan an 18-month option to increase its interest in Tiomin to 30% by subscribing for addi- tional common shares at a price of C$0,35 a share, raising an addi-tional C$17-million in new cash resources, if exercised. The financing is subject to regulatory and Tiomin shareholder approval.



Tiomin chairperson and CEO Jean-Charles Potvin comments, “Jinchuan and Tiomin are united in their desire to jointly develop Kwale. This financing begins what we hope is an accelerated development programme with potential cost savings by maximising Chinese content. “Jinchuan is a world-class mining company with extensive project development experience and it is an ideal partner for Tiomin and Kenya. This agreement is a very logical step as we build Tiomin into a global titanium producer and it confirms our belief that the Kwale project has significant merit that is not recogni- sed in Tiomin’s share price. Our stronger balance sheet and the support of Jinchuan will enable Tiomin to pursue the acquisition of additional titanium assets worldwide.”



Jinchuan is the largest producer of nickel, cobalt and platinumgroup metals (PGMs) in China, combining mining, milling, smelting and refining, and chemical engineering operations.

The output of nickel and PGMs is 88% and 90% respectively of total Chinese production.



Mining Weekly reported in February that Tiomin had halted the development of the Kwale mineral-sands project. Tiomin investor relations head Laurie Gaborit said at the time that seven farmers had taken Tiomin to court as they refused the compensation being offered by the government of Kenya, causing the delay.

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