TORONTO (miningweekly.com) – ASX- and TSX-listed potash project developer Elemental Minerals on Tuesday expressed its dismay at the fact that an off-market takeover offer by Hong Kong Stock Exchange- (SEHK-) listed company Dingyi Group Investment would fail, after a SEHK listing committee upheld a decision to classify the deal as a ‘reverse takeover’ under its listing rules.

Perth-based Elemental said as a result of Dingyi not being able to meet its shareholder approval condition, the offer would lapse on March 31.

During July last year, Elemental and Dingyi entered into the bid implementation agreement under which Dingyi would pay A$0.66 per Elemental share. The bid, valued at that time at about A$160.8-million, was conditional on 50.1% minimum share acceptance and shareholder approval.

However, as a result of the SEHK’s decision, Dingyi would not be able to satisfy the shareholder approval condition because it would not be able to obtain clearance from the SEHK to issue the documentation required to convene a general shareholder meeting through which it would obtain the Dingyi shareholder approval.

“This outcome is disappointing given the effort both parties have made throughout this transaction. The board is assessing the impact of this development on the company and will update the market in due course,” Elemental said.

The company added that all shares tendered to the offer and which had not been validly withdrawn, would become void at the end of the offer period and those accepting Elemental shareholders would retain their Elemental shares.

In March last year, Elemental launched a hunt for a possible joint venture partner to develop its Sintoukola potash project, in the Republic of Congo.

A prefeasibility study into the project has shown that it could deliver some two-million tons a year of muriate of potash, and the underground operation was expected to have a mine life of some 23 years. The project could be developed at a total capital cost of $1.85-billion, and would have a net present value of $2.9-billion, and an internal rate of return of 29.3%.

Elemental was targeting initial potash production by 2017 and to reach full capacity in 2018.

Elemental’s TSX-listed stock on Tuesday shed 22.22% to trade at C$0.21.