Wednesday, October 24, 2012

Bibiani mine seeks survival

Noble Mineral Resources, which owns the Bibiani mine, has secured an A$84.7million investment from China’s Zhongrun, which will see the Chinese mining and investment group owning 41.5% of the Australian company with an option to increase its stake to 51.6% .

Noble’s Managing Director, Wayne Norris, said that the A$84.7million investment will be executed over two tranches, with some 101.8-million shares issued at 16 cents per share under the first tranche of the offer.

The second tranche will consist of 380 million shares issued at 18 cents per share. Zhongrun will also be issued with options over an additional 240.9 million shares in Noble, exercisable at 23 cents per share.

Norris said the funds raised by the share placement will enable Noble to accelerate and complete commissioning its flagship Bibiani project in Ghana, as well as meet all its existing liabilities and allow the company to potentially pursue other organic and inorganic growth options.

 The Bibiani mine, formerly owned by AngloGold Ashanti, could be become a major gold producer if the deal goes through.

 “Following the investment, Noble will have a fully-funded, ungeared and unhedged gold company with a clear pathway to production of some 150,000 oz/y from Bibiani, and a strong platform to pursue future growth opportunities with the benefit of a supportive strategic shareholder and partner.”

Noble announced in July that it was reviewing its options to raise additional capital to fund its operations, and Norris said last week that the company has received a number of approaches from third parties around potential corporate and strategic transactions.

However, in a conference call he said the Zhongrun offer had been considered as the best option for Noble.

 “The announced strategic partnership with Zhongrun represents the culmination of this process and follows extensive discussions with a broad range of parties who expressed interest in investing in Noble.

 “The strong level of interest received reflects the underlying quality of the Bibiani project, as well as the significant progress made by Noble management in the short time period since assuming operational control of Bibiani,” Norris said.

Bibiani, initially acquired by the former Ashanti Goldfields from Canadian and Libyan investors in the 1980s, was sold to Central Africa after the creation of AngloGold Ashanti in 2005 -- and since then Bibiani has gone through long periods of ownership-change due to operational and funding difficulties.

 The Chinese deal has been secured at a time Chinese miners are being accused of scrounging illegally with sophisticated equipment on concessions owned by the big mining companies; such as AngloGold Ashanti and Golden Star Resources as well as individual Ghanaians.

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