Mineral sands miner Sierra Rutile on Wednesday advised shareholders not to take any action regarding an unsolicited takeover bid worth A$40-million from investment group PRM Services.
The company offered to acquire all the Sierra Rutile shares that it does not own at A$0.095 a share. PRM has an interest and voting power of about 11.46% of Sierra Rutile’s shares.
The bid pushed up the Africa-focused mineral sands miner’s share price on the ASX by 34% to A$0.10 apiece.
PRM, under leadership of Gerald Group CEO Craig Dean, is an investment firm with a global presence and particularly active in Africa’s commodity sector, focusing on critical metals and minerals.
In its bidder’s statement, the suitor says that Sierra Rutile has the potential to be a viable and profitable operating company, with the correct guidance, strategy and resources deployed. PRM, the statement notes, has a proven track record in mining, operations and build-out and ramp-up in Africa, including Sierra Leone.
Sierra Rutile last week suspended all mining and processing activities at its Area 1 operations, which will result in about one-quarter of staff losing their jobs.
These actions, the company said, were in response to ongoing weak market conditions and uncertainty regarding the fiscal regime applicable to Area 1 operations.
The rutile miner is in negotiations with the Sierra Leone government to reach an agreement on a fiscal regime that would support production alongside supportive market conditions. Failure to reach an agreement with government could result in the full closure of Area 1.
Sierra Rutile also owns the Sembehun project and expects the outcomes of a definitive feasibility study to be announced in April.