Middle Island shares fall as Samira Hill deal collapses
PERTH (miningweekly.com) – The share price of Middle Island Resources dropped by 15% on Thursday on news that the company had failed to secure a majority interest in the Samira Hill gold mine, in Niger.
The acquisition agreement with TSX-listed Semafo, over the Samira Hill project, lapsed at the start of the month, prompting Middle Island to re-enter negotiations with the Niger government with a view to securing government support for the purchase.
However, the miner said on Thursday that it had failed to reach a commercial outcome to these negotiations by the October 31 deadline.
MD Rick Yeates said that the Niger government had sought to modify the commercial terms originally agreed between Middle Island and the vendor, and despite concessions by the company, the proposed new terms remained outside of what was deemed commercially viable.
With the deal now called off, the A$5-million received from a conditional placement would be returned to investors, and Middle Island called off a proposed share purchase plan to fund the project acquisition.
Yeates reiterated the company’s belief that the exploration permits contained within the agreement were central to the viability and longevity of the Samira Hill mine, and added that Middle Island remained receptive to an approach from the current project owners allowing Middle Island to purchase a majority interest in the project.
Meanwhile, the Middle Island board would turn its focus to pursuing other projects to maximise shareholder value, as well as to advance the company’s existing gold projects in West Africa.
Middle Island shares were trading at a low of A$0.085 on Thursday, down from a high of A$0.11 a share.
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