Sales price of 18 million Canadian Dollar/Shareholding in larger tungsten company
Heidelberg/Toronto. Deutsche Rohstoff AG signed a contract today for the sale of all shares of the 100% owned subsidiaries Wolfram Camp Mining and Tropical Metals. The companies are the operating entities for the Wolfram Camp tungsten and molybdenum mine in Queensland, Australia. The purchase price amounts to 18 million Canadian Dollar (CAD), which converts to approximately 12.3 million Euro at current exchange rates. The buyer is the Canadian company Almonty Industries that operates the Los Santos tungsten mine in Spain. The shares of Almonty are traded on the Canadian TSX Venture exchange in Toronto.
According to the contract the purchase price consists of the following components:
– Deutsche Rohstoff will receive close to 12.2 million shares to be issued by Almonty that represent a value of CAD 10.5 million and translate into a shareholding of Altmonty’s issued stock of 24.9%.
– For the remaining share of the purchase price of close to CAD 7.5 million, Deutsche Rohstoff will receive a convertible bond. The bond has a maturity of 2.5 years at an interest rate of 4%. DRAG has the option to convert the bond into shares of Almonty at a conversion price of CAD 1.45.
The completion of the contract is subject to several conditions to be fulfilled. Part of the conditions is the approval of the shareholder meeting of Almonty as well as the consent to the transaction by third parties. Especially the consent of the Toronto Stock Exchange and the declaration of no objection for an investment by a foreign party, to be issued by Australian authorities, are necessary. Both signing parties of the contract expect a closing of the transaction by the end of August.
Titus Gebel, CEO of Deutsche Rohstoff AG, commented: „From our perspective, Almonty is the ideal buyer for Wolfram Camp. The management team has significant experience with tungsten mining and has demonstrated that it can successfully operate mines on a long-term basis. DRAG will still maintain a significant share in a larger tungsten mining company. We are confident that this shareholding will gain further value due to the strong fundamentals of tungsten as well as the favourable market position of Almonty.“
Lewis Black, Chief Executive Officer of Almonty commented: “We are pleased to have acquired the Wolfram Camp mine and to have almost doubled the size of Almonty’s tungsten operations. WCM is a wolframite producing mine which we consider to be similar in many respects to the Panasqueira project that was previously successfully renovated and subsequently sold by the current Almonty management team when it was held by Primary Metals Inc. Our technical team, having spent the majority of their careers working with wolframite ore, and now scheelite ore at the Los Santos Project, is highly confident regarding the upside potential of WCM. The addition of DRAG as a major shareholder in Almonty is also welcome and will allow DRAG and its shareholders to maintain their tungsten exposure in a much larger entity. Upon completion of the transaction Almonty will be the only listed company with two operating tungsten mines, producing both scheelite and wolframite concentrate.“
Heidelberg, 30 June 2014