JOHANNESBURG (miningweekly.com) – Cameroon-focused iron-ore junior Afferro Mining said on Wednesday that it had agreed to terms for a $190-million offer from investment group International Mining & Infrastructure Corporation (IMIC).
IMIC, which currently owns 5% of Afferro, would offer 80p in cash, as well as a two-year convertible loan note with a principal value of 40p for each share of the TSX-V and Aim-listed junior.
Afferro chairperson David Netherway said the effective 120p-a-share proposal offered good value and the ability for further upside, providing exposure to the strong relationships built by IMIC with its key consumer, China.
“We have developed a world-class asset in the Nkout project, which, along with our other iron-ore projects, is in a substantial new iron-ore corridor running through Cameroon. It has been of the foremost importance for the board of Afferro to come back to shareholders with a revised and simplified offer to best optimise their returns,” he commented.
IMIC chairperson Haresh Kanabar added that the merger of IMIC and Afferro was “highly attractive” in that it would combine Afferro’s high-quality African iron-ore assets with a deliverable infrastructure and offtake solution.
IMIC requires the approval of at least two-thirds of Afferro’s shareholders.
Afferro's board, which, in aggregate, held 6.3% of Afferro’s share capital, confirmed that it would be voting in favour of the offer.
Subject to the completion of relevant documentation, including satisfactory final financing arrangements and the receipt of a fairness opinion from its financial adviser, as to the terms of the proposed offer, the Afferro board said it intended to recommend acceptance of the offer to its shareholders.
The proposed acquisition would also be subject to the approval of IMIC shareholders, as well as the completion of the documentation required to implement a reverse takeover under the Aim rules of the LSE.