JES International inks deal to acquire mine exploration business in Xinjiang, China

Mainboard-listed JES International Holdings has entered into a conditional agreement to buy up to 30 per cent of Mineriver for $127 million.

The acquisition by the China-based shipbuilding group will be carried out in three tranches. It plans to obtain a 5 per cent stake in tranche 1 for $7 million.

For the second tranche, it will acquire a further 15 per cent for $60 million.

For the third tranche, it has an option to buy another 10 per cent at about $60 million.

The aggregate amount of $127 million shall be satisfied by cash and issuance of new JES shares.

Mineriver is a Singapore-incorporated company, which is acquiring the entire issued share capital of a Xinjiang company, which holds mineral exploration rights in the Xinjiang Uygur Autonomous Region, China.

The mineral exploration rights relate to metals and minerals, which includes magnesium and nickel.

Subsequently, Mineriver is expected to obtain the relevant mining rights and operate production lines to manufacture magnesium products.

SRK Consulting China has been engaged to prepare the report relating to the assets in the mine locations.

Under the agreement, JES is only expected to proceed with the tranche 2 and tranche 3 purchases when the measured and indicated mining value of the assets exceeds a predetermined value.

Mineriver is considering seeking a listing on a recognised stock exchange in due course.