Fortis Mining to acquire rights to potash assets in Kazakhstan
Feb 22. Proactive Investors
Fortis Mining (ASX: FMJ) has signed an agreement to acquire the proprietary and legal rights to two Kazakhstan potash assets through a 75% shareholding in Hong Kong based company, Ji’an Resources Investments Limited.
Ji’an Resources has the right to purchase 100% of the shares in Wiyot SA, a Panamanian company which owns 95% of the shares in Bates Potash Co. Limited, who in turn holds 100% of rights to the potash assets.
The purchase price for the acquisition of Ji’an Resources will be paid for via a $1 million deposit and the issue of 40 million shares on completion of the transaction. The shares will be subject to three years cascading voluntary escrow.
The purchase price to complete the Wiyot SA contract is still to be finalised as it is subject to a number of condition precedents and variable contractual terms.
Following completion of its due diligence phase which is scheduled to be finalised by 30 May 2011, the company will have more details in respect to the true purchase price.
The mines are located in western Kazakhstan, and are well positioned to serve the largest Asian potash markets, with one mine sited just 14km from the national rail link to China.
Owing to historical exploration and mining in the region, some infrastructure already exists. The extent of this infrastructure will be determined during the due diligence phase.
The transactions contemplated by the heads of agreement remain subject to a number of key conditions precedents being satisfied, including:
– completion of detailed due diligence (legal, technical, exploration data, etc) on the two Kazakhstan assets;
– completion of detailed due diligence in respect to the legal, contractual and proprietary rights between to Ji’an Resources, Wiyot SA and Bates;
– execution of final transaction documents;
– approval from all relevant Governments and regulatory authorities; and
– approval from Fortis shareholders (discussed below in further details).
The company will be required to call an extraordinary general meeting of shareholders to obtain shareholder approval for the transaction. On approval, trading in the company’s securities will be suspended.
Provided all condition precedents are satisfied, completion of the transaction is not anticipated to occur until 30 October 2011.