Matsa entertains prospective Chinese investment
THE BOURSE WHISPERER: Western Australia-based Matsa Resources is getting ready to entertain a couple of possible Chinese suitors at its 1.47 million ounce Norseman gold project located in the Eastern Goldfields region.
Matsa has signed a non-binding terms sheet with Shandong Gold Mineral Resources Group Co. Ltd and has also received a separate letter of intent to enter into a binding agreement from China Nerin Engineering Co. Limited.
The company said it is confident negotiations with either party could lead to a binding agreement and enable it to develop its Norseman gold project.
“There has been significant interest among numerous Chinese investors in our Norseman gold project for some time and our over-riding priority has always been to ensure we get the best deal for our loyal shareholders for the long term,” Matsa Resources executive chairman Paul Poli said in the company’s ASX announcement.
“Given the level of interest in Matsa and both our projects in Norseman we could have already completed a deal with other Chinese investors, but those terms were less favourable than the current discussions.
“That’s why we have decided to patiently continue negotiations with these prestigious Chinese companies so we can negotiate a deal that allows for the development of the Norseman Gold Project and is beneficial to all shareholders.”
The non-binding agreements are the result of discussions Matsa has held over the last 12 months with a number of companies interested in developing the Norseman gold project.
The key features of the Terms Sheet and Letter of Intent include:
– Acquiring a significant interest in the Norseman Gold Project held by ASPMI Pty Ltd (a wholly-owned Matsa subsidiary);
– The securing of a finance facility of approximately $103M which is the preliminary estimate to establish the plant and mine;
– Participating pro rata in the Definitive Feasibility Study;
– Establishing a Joint Venture entity with Matsa to look for further resource opportunities throughout Australia;
– Securing off take agreements for the magnetite by-product produced by the Norseman Gold Project.
“I am pleased to report that following many months of comprehensive negotiations we are starting to narrow the field down to a number of potential investors,” Poli said.
“The focus of these discussions and negotiations will centre on entering into a formal binding agreement with one company as soon as possible.
“Both have the potential to position Matsa as one of Australia’s fastest emerging diversified resource companies with a clear path to production across its range of projects.”
Although Matsa considers these talks to be a positive step forward it emphasised that there is no certainty that an agreement will be reached.
The company said it will continue discussions with further potential investors until a formal agreement has been reached.