Iluka Resources’ $375 million takeover of Sierra Rutile will go ahead after concerns about the West African company’s tailings dams were resolved.
The deal was on track for completion on November 30 until Iluka put the takeover on hold after it identified geotechnical issues with the tailings dams during a site visit.
“Iluka had concerns in relation to the Gangama dam, used as a water storage and tails facility, where leakage of water was evident, and in relation to the Lanti containment ponds, with the respect to the amount of freeboard,” the mineral sands company said in an ASX statement.
However, Iluka management and consultants have since revisited the site and determined that the risk of dam failure is low.
“Iluka has been able to secure additional information from Sierra Rutile about the dams and their construction. Iluka has also retained an independent geo technical consultant to make on-site assessments and advise Iluka,” the company reported.
“The independent geotechnical consultant, Knight Piesold, has confirmed that, subject to the lowering of water levels in the Lanti containment ponds, the risk of immediate failure of the dams is low. Iluka confirms that the water levels in the Lanti containment ponds have been lowered to an acceptable level.”
Iluka, which will pay Sierra Rutile shareholders 36 pence ($0.63) a share under the agreement, added that the deal would be completed on December 8.