Maputo, Mozambique — 16 October 2013 – Redbird Investments “’ a subsidiary of African Minerals Exploration & Development SICAR SCA “’ is set to buy 5 million shares in Australian mining company Baobab Resources, under the terms of a newly announced contract.
Issuing these shares will provide Baobab Resources with a cash injection, before costs, of US$1.2 million, which it plans to use to conclude final feasibility studies for its pig iron project in Mozambique, reports Macauhub News Agency.
The company plans to produce pig iron with low levels of impurities from iron ore deposits in Tenge/Ruoni in the central Mozambican province of Tete, as well as thermal coal, and expects to produce up to 2 million tons of pig iron per year.
Once this financial operation is concluded, Redbird Investments will have 26.8% voting rights in Baobab Resources compared to 26.73% at the moment.
The companies also agreed to place another 8.5 million shares with Redbird Investments, which needs shareholder approval and would provide Baobab with US$2 billion before expenses.
Under the terms of the contract that was signed, Redbird Investments will also be given an option to subscribe up to 27 million ordinary shares, increasing its stake in the company to 37.85%.
Source: Macauhub News Agency. For more information, click here.