A floating plant at Sierra Rutile's operations.
JOHANNESBURG (miningweekly.com) – Australian mineral sands miner Iluka Resources has confirmed that it is considering an offer for Aim-listed Sierra Rutile, noting that discussions are at an advanced stage.
Iluka revealed the potential deal in a request for a trading halt on the ASX on Friday, stating that confidentially had been lost in relation to its discussions with Sierra Rutile.
The Australia-based miner intends to make an all-cash bid and Sierra Rutile has confirmed separately that Iluka plans an offer of 36p an ordinary share.
Sierra Rutile, which owns rutile assets in Sierra Leone, traded at 38p a share on the London market on Friday morning, giving it a market capitalisation of about £225-million ($297-million).
Sierra Rutile is ramping up a new mine, Gangama, in Sierra Leone, which is expected to achieve steady-state production in the third quarter of this year. The new mine will help increase production to between 120 000 t and 135 000 t this year.
Iluka is a major producer of zircon and the largest producer of the high-grade titanium dioxide products of rutile and synthetic rutile, with operations in Australia and the US.
Iluka expects to make an announcement regarding the takeover on or before Tuesday.