JOHANNESBURG (miningweekly.com) – Australian mineral sands miner Iluka Resources on Monday reached an agreement with Aim-listed Sierra Rutile to acquire all of its issued and to-be issued shares for £215-million.
The acquisition will be implemented by merging Sierra Rutile with Iluka Investments (Iluka Newco), a wholly-owned incorporated subsidiary of Iluka International.
Through the deal, Sierra Rutile shareholders will receive 36p for each share. The miner, which has assets in Sierra Leone, traded at 35p a share on the London market on Monday morning.
“The acquisition will provide the company with additional, long-life resources of proven quality, with further potential through resource additions, reserve optimisation and exploration. The combination enhances Iluka's rutile portfolio position and sits alongside our existing position as the largest global zircon producer,” Iluka MD David Robb said in a statement.
Sierra Rutile CEO John Sisay added that the buy-in demonstrated that Sierra Leone was open for business and able to attract investment from high-profile multinational companies, such as Iluka, that was keen to participate in the development and growth of the country.
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’s shares traded 1.28% higher at A$7.11 a share on Monday afternoon.