Equatorial acquires interest in African Iron

THE BOURSE WHISPERER: Central west Africa-focused iron ore exploration play Equatorial Resources has acquired 19.9% of the ordinary share capital of African Iron Limited.

The acquisition came through the purchase of 95.4 million ordinary African Iron shares.

Equatorial made the purchase of the 13.9 million shares on market for a total cash consideration of $3.4 million.

A further 81.5 million shares were purchased off market for consideration in the form of 11.4 million Equatorial shares at the rate of one share in Equatorial for every 7.16 shares in African Iron.

The Equatorial shares to be paid as consideration will be issued subject to shareholder approval which the company is eager to receive as soon as possible.

“We are very pleased to have acquired this strategic stake in African Iron Limited,” Equatorial Resources managing director John Welborn said in the company’s ASX announcement.

“In the longer term we see a number of positive synergies between our two iron projects afforded by their close proximity and their strategic access to operational transport infrastructure.

African Iron holds an 80% interest in the Mayoko-Lekoumou iron project, which lies adjacent to Equatorial’s Mayoko-Moussondji iron project in the Republic of Congo.

The two projects are intersected by a bulk haulage railway line that leads directly to the deep water port of Pointe-Noire.

“It is not our current intention to make a takeover bid for African Iron as we continue to focus on adding value to our 100% owned Mayoko-Moussondji and Badondo iron projects,” Welborn continued.

“We will continue to cooperate with African Iron on a number of positive operational initiatives at Mayoko and within the Republic of Congo as we become major players in the development of this globally significant iron ore province.”