PERTH (miningweekly.com) – Iron-ore miner Murchison Metals told shareholders this week it could take up to six months before the proceeds from the sale of its interest in Crosslands Resources and the Oakajee Port and Rail joint venture (JV) projects could be divvied up to shareholders.

In November, Japan’s Mitsubishi agreed to buy Murchison’s 50% stake in the JV for A$325-million in a move to rescue the two beleaguered projects in Western Australia.

The transaction was expected to deliver net cash proceeds of some A$217-million to Murchison shareholders.

Murchison said it was considering efficient mechanisms of distributing the majority of the net cash proceeds to shareholders, and as part of that process, the company was seeking a ruling from the Australian Taxation Office regarding the tax treatment of the distribution.

The company would also need to prepare audited financial statements to determine the proceeds which would be available for distribution, taking into account any residual liabilities that could emerge in respect to the transaction.

Murchison said that given the expected time to proceed with a distribution, the board intended to use the intervening period to assess the merits of any investment opportunities in the resources sector, which would have the potential to enhance shareholder value.

The assessment could extend beyond the expected time required for the distribution proceedings, if a compelling investment opportunity was identified, the board said.

“I believe it is prudent to use the time required to proceed with any distribution to shareholders to investigate whether there are any compelling investment opportunities available to the company,” said nonexecutive chairperson Ken Scott-Mackenzie.

A shareholder's meeting for the proposed divestment of the JV interest to Mitsubishi would be held on February 13.

The deal has already been approved by the Foreign Investment Review Board.
 

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