Copper miner Tiger Resources plans to exit the Democratic Republic of the Congo (DRC) after securing a deal to offload its assets to a Hong Kong investment firm for $US260 million ($325 million).
Perth-based Tiger has been voluntarily suspended from the Australian Securities Exchange (ASX) since February last year as it worked to overcome financial and operational issues.
The proposed agreement would see Sinomine HK acquire Tiger’s interests in the Kipoi mine, Lupoto project and La Patience permit in the central African country.
If completed, the transaction would return Tiger to a debt-free and net cash position, while releasing it from several financial liabilities.
Tiger chairman David Frances said the company had faced numerous operational and financial headwinds over the past 12 months, leading to the voluntary suspension and it requiring support from lenders and creditors to continue operating.
“The board has been pleased with the progress of the operational turnaround and the rectifications that have been made to improve the performance of the Kipoi operations, as reflected in the recent increase in the tank leach throughout,” Frances said.
“In parallel with this operational turnaround, the company has been considering various strategic options that will allow it to address its balance sheet issues and ultimately realise value for its shareholders.
“After careful consideration of the strategic options, the board believes this transaction provides shareholders with the greatest certainty of value realisation and that, on balance, it is in the best interests of shareholders, employees, the Kipoi operations and the future potential of Tiger.”
The proposed $US260 million payment involves $U250 million in cash and $US10 million in the assumption of liabilities by Sinomine HK.
Tiger will also be entitled to receive royalty payments from revenue generated from the sale of copper and cobalt by Sinomine HK up to $US20 million.
The deal still needs to meet several conditions, including approval from Tiger’s shareholders. Tiger hopes to complete the deal “shortly after” it holds an extraordinary general meeting in March.