TORONTO (miningweekly.com) – TSX-listed Tiomin is “seeking clarification” (to put it mildly) from China's Jinchuan Group, after receiving a notice of intent to terminate an agreement in which the Chinese firm was to buy 70% of Tiomin's Kwale mineral sands project, in Kenya.

Tiomin shares fell 29% on Wednesday, to 2,5 Canadian cents by 15:59 in Toronto.

The notice was received just two days before the deal was to have closed after all the material requirements had been completed, the firm said.

“We find this decision astonishing,” Tiomin CEO Bob Jackson said.

“We have battled bureaucracy and corruption in Kenya for over a decade and our remaining concern was to obtain a comfort letter from the government of Kenya. We finally obtained this yesterday.”

Jinchuan's reason for the termination -  that it is “not satisfied with the disclosure schedule”, had not been raised before, through 15 months of process, Jackson said.

Tiomin will go ahead with its shareholders meeting to approve the transaction on Thursday regardless, he said.

The company is, however, “considering its alternatives” for the Kwale project.

Once in production, the mine is expected to produce an average of 330 000 t/y of titanium-bearing ilmenite, 77 000 t/y of rutile and 37 000 t/y of zircon.

Jinchuan and Tiomin initially signed a memorandum of understanding in July 2008, eventually followed by an investment agreement in August this year.

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