JOHANNESBURG (miningweekly.com) – Australian exploration company Newfield Resources (NWF) and Africa-focused miner Stellar Diamonds have reached an agreement regarding NWF’s proposed acquisition of Stellar’s entire issued and to be issued share capital for £7.74-million.
The ASX-listed company owns an advanced diamond project in Sierra Leone, comprising four exploration licences covering 780.9 km2 and several gold projects in Western Australia.
The NWF board believes Stellar’s Tongo-Tonguma kimberlite project, which lies to the north-east of NWF's Allotropes diamond project, in Sierra Leone, complements NWF's existing operations in the country, as well as offers the potential for substantial near and long-term cash flows.
The companies would merge the business interests of NWF and Stellar in Sierra Leone and use the proceeds of a proposed NWF rights issue – raising $30-million through the placement of 200-million shares at $0.15 apiece – to advance the Tongo-Tonguma project into production.
On completion of the combination, Stellar CEO Karl Smithson would be invited to join the NWF board as an executive director. It is intended that Stellar COO Rowan Carr and other senior staff, including the Tongo project manager and plant/metallurgical manager, would also be retained by NWF after completion of the scheme.