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PERTH (miningweekly.com) – London-listed Kenmare Resources has rejected a proposed takeover offer by Australian mineral sands miner Iluka Resources.
Iluka told shareholders that it had approached Kenmare regarding the potential combination of the two companies, but said it was uncertain at this time if any transaction would progress, or that a viable offer would be made.
“Iluka’s assessment of a potential transaction involving Kenmare is consistent with Iluka’s strategy of assessing various mineral sands opportunities, and exploring transactions where financial merit and strategic rationale may exist,” the ASX-listed company said on Thursday.
Iluka has moved to diversify its geography, acquiring the Sri Lanka-based PKD Resources in October last year. The company recently also signed a joint venture agreement with Brazilian major Vale to evaluate and develop the Tapira titanium deposit, in Brazil.
Kenmare, meanwhile, told its shareholders that its board of directors believed the proposed offer, which had been based on a share for share exchange, with Kenmare shareholders receiving 0.036 Iluka shares for each Kenmare share held, did not recognise the value inherent in the Moma titanium mineral sands project as a long-life, low-cost asset.
It further pointed out that M&G Investment Management, which managed funds owning 19.05% of Kenmare, supported the board’s decision.
Kenmare's current operating capacity at full production is 800 000 t/y of ilmenite plus 50 000 t of co-product zircon and 14 000 t of co-product rutile. After an expansion ramp-up, capacity would increase from 800 000 t/y to 1.2-million tonnes a year of ilmenite plus associated co-products.