Fortis Mining stopped from raising $35M for Kazakh potash projects

December 28. Universal Newswires

Fortis Mining stopped from raising $35M for Kazakh potash projectsAustralian minerals explorer Fortis Mining’s plans to acquire two large potash mines in Kazakhstan hit a snag late last week when the Australian corporate regulator stopped it from selling $35 million of its shares to fund the purchase.

It is not clear why the regulator halted the fundraising, but it is believed it wanted more information on new board members, including the chair, in Fortis’ November prospectus.

The Melbourne-based company plans to use the proceeds from the shares sale to purchase the projects in a complicated transaction involving the use of three tax havens, Australia’s BusinessDay news agency reported on Wednesday.

But the Australian Securities and Investments Commission (ASIC) on Friday issued an interim stop order to January 13.

Fortis had agreed to achieve 100 percent ownership of the western Kazakhstan mines from Chinese company Jian Resources and British Virgin Islands-registered United Delight Holdings for $238 million in cash and convertible notes.

For its part Jian would buy Wiyot, a Panamanian-registered company which appears to be mainly owned by Kazakhs, for up to $215 million. It has already given a $30 million downpayment of Fortis money.

Fortis operates gold and base metals prospects in Western Australia, but warned in November of ”significant doubt about the company’s ability to continue as a going concern” if it did not close the Kazakhstan deals, the news agency reported.

The Chelkar and Zhilyanskoe potash salt deposits are among the world’s largest, with a combined recoverable reserve of 7.3 billion tons.

On Wednesday, Fortis Mining announced that its CEO Jitto Arulampalam would be stepping down “with immediate effect,” while Terence Wong will act as Managing Director, also immediately. The firm did not state who would replace Arulampalam.