Bushveld Minerals, the diversified mineral development company, will make an off-market takeover offer to acquire all of the ordinary shares that it does not currently own in Lemur Resources.
The AIM-listed company, which is focused on vanadium and titanium bearing magnetite and tin assets in southern Africa, currently has a relevant interest in ASX-listed coal junior Lemur of approximately 63.6%.
The deal and rationale
Bushveld intends to make the offer for a consideration of A$0.06 per Lemur share, valuing Lemur at A$10.875 million. Bushveld is advised that certain Lemur shareholders, who together hold approximately 10% of the issued share capital of Lemur, intend to accept the offer within 10 business days upon commencement of the offer period, in the absence of a superior proposal being publicly announced before the end of that 10 business day period.
Following successful completion of the offer, Bushveld intends, among other things, to consider applying to remove Lemur from the ASX. Fortune Mojapelo, CEO of Bushveld Minerals, says: “I am pleased to announce Bushveld’s intention to make an off-market takeover offer for Lemur Resources. This offer, if successful, will allow Lemur shareholders the certainty of a cash exit for their shares and transfer the risk associated with developing Lemur’s assets to its parent company, Bushveld Minerals.”
“For Bushveld shareholders the offer, if successful, provides an opportunity for greater alignment of Bushveld’s and Lemur’s interests.” In March this year, Lemur revealed it had acquired a tin property of its own in South Africa.
The possibility of applying to remove Lemur from the official list of the ASX is due to the lack of liquidity in Lemur’s stock; the high administrative costs associated with being listed on the ASX; the negative sentiment towards junior resource companies on the ASX (which the board of Bushveld considers likely to continue over the short to medium term); and the need to focus capital-markets efforts through Lemur’s parent company, Bushveld.
Bushveld owns the vanadium project, P-Q iron ore and titanium project and the Mokopane tin project, all located on the northern limb of the Bushveld Complex, South Africa. It was admitted to the AIM market in March 2012.
Through Lemur’s wholly owned subsidiary Coal Mining Madagascar, Lemur is the holder of 11 concession blocks in South West Madagascar covering the Imaloto Coal Basin, known as the Imaloto Coal Project and Extension. In addition to this, CMM is in the final stage of acquiring two further blocks contiguous to the existing holdings, and is now awaiting ministerial approval for the transfer. This project area is known as the Imaloto Project Extension. Lemur holds two further projects known as the Ianapera Coal Project and Sakaraha Coal Project.