CZR Resources has announced a $75 million binding offer from the Robe River Iron Associates joint venture (RRJV), led by Rio Tinto.
This offer is ‘determined superior’ to the proposal previously launched by Fenix Resources.
The RRJV – which comprises of Rio Tinto, Mitsui & Co and Nippon Steel – is seeking to acquire CZR’s interest in the five tenements that make up CZR’s Robe Mesa iron ore project.
“This is more favourable to CZR shareholders than the transaction contemplated by the Fenix takeover offer,” CZR said.
“The consideration of $75 million represents a significant premium to the all-scrip Fenix transaction.”
The offer also includes a working capital loan facility of $3.85 million for CZR subsidiary Zanthus Resources and a release deed in which Mark Creasy and ZanF waive joint venture rights to enable the transaction.
The company said the post-tax cash proceeds, estimated at $68 million, would place the company in a strong position to develop its retained portfolio.
“The cash consideration also reduces CZR’s exposure to capital and commodity markets in a highly volatile period, while allowing it to assess new business opportunities and/or consider a return of capital to shareholders,” CZR said.
The company will also retain its highly prospective non-Robe Mesa assets, including a 50 per cent interest in the Ashburton link and port project, the Croydon gold project near De Grey’s Hemi discovery, and the large-scale Buddadoo titanium-vanadium magnetite target.
CZR has informed Fenix of its decision and has until 5pm AWST on April 17 to respond with a counter proposal.
In a further show of confidence, CZR’s largest shareholder Mark Creasy has shown support for the Robe River JV offer.
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.