SINGAPORE - ISR Capital's long-drawn out $3 million acquisition of a rare-earth mining asset in Madagascar will finally come to fruition as the company announced it waived a sale condition so as to proceed with the deal's completion, which is scheduled to take place on or around Dec 31, 2018.
ISR, which has been on the Singapore Exchange's watch list since December 2017, has faced questions over its purchase of the 60 per cent stake in Tantalum Holding (Mauritius) (THM), which fully owns Tantalum Rare Earth Malagasy SARLU (TREM). The latter holds an exploration licence for a rare-earth mining concession in Madagascar.
The purchase has been in the works since June two years ago.
The waived consition relates to ISR and the seller REO Magnetic agreeing on the project's cash flow budget and liquidity plan.
"As further studies will be conducted on the project after the completion, including but not limited to environmental impact assessment and feasibility study, the board is of the view that the cash flow budget and liquidity plan will be more reliable if these are prepared concurrently with / using the results of these studies after the completion of the proposed acquisition," the company said in an SGX filing on Monday morning before market open.
ISR will allot and issue the some 747 million new shares at 0.4 cent apiece for the purchase around Jan 2, bringing the total number of issued and paid up shares in the company to nearly 3.91 billion.
To facilitate the deal's completion, the parties have further agreed to extend the long-stop date to Jan 3, 2019.
At an extraordinary general meeting (EGM) in October where shareholder approval was achieved, executive chairman Chen Tong said it was not confirmed as to whether the full mining licence would ultimately be granted to them.
A renewal application was sent in December 2016, but the licence has not been renewed since.
ISR last closed at 0.3 cent.