THE BOURSE WHISPERER: Tiger Resources (ASX: TGS) has reached an agreement to acquire the remaining 40 per cent shareholding in Société d’Exploitation de Kipoi SA (SEK), which is the owner of the Kipoi copper project in the Democratic Republic of Congo.
The Tiger Group currently holds 60 per cent of the shares in SEK.
Once the agreement has been completed, subject to conditions, Tiger will acquire the remaining 40 per cent interest.
As a result SEK will then become a wholly-owned subsidiary of Tiger.
The agreed purchase price is US$111 million, of which Tiger has already paid a deposit of US$6.5 million.
A completion payment of US$104.5 million is due by 10 November 2014.
After the transaction has been finalised, Tiger said it intends to cede a 5 per cent interest in SEK to the DRC Government, which will bring the mining title into alignment with the country’s current mining law and regulations.
Tiger currently manages operations on behalf of SEK at Kipoi where construction of a 25,000 tonne per annum solvent extraction electro-winning plant (SXEW) was recently completed and subsequently successfully commissioned.
“Kipoi has been the cornerstone of our business over the past seven years and together with our DRC business partner we are proud of our achievements,” Tiger Resources managing director Brad Marwood said in the company’s announcement to the Australian Securities Exchange.
“We see the potential to grow our business by focusing on near-mine exploration and sourcing plant feed from elsewhere in the Kipoi region, thus ensuring the mine should operate well into the next decade.
“We believe the acquisition of the additional 40 per cent interest in SEK to be earnings-accretive and offers the opportunity to grow our business and cement our future in the DRC as a 50,000 tonnes per year copper cathode producer once the proposed expansion of the SXEW facility has been completed.
“The purchase price is considered a good outcome for all parties having regard to the current 25,000 tonnes per annum copper cathode production and the fact that the heavy media separation operations are nearing the end of their life.”