Mainboard-listed ISR Capital's plan to acquire a stake in a mining concession has drawn yet another query from the Singapore Exchange (SGX).
This time, the bourse operator is questioning whether a new valuation report on the concession had been done in accordance with listing rules, saying it lacks pertinent information, among other things.
ISR said in two announcements in June and July that it planned to acquire a 60 per cent stake in Tantalum Holding (Mauritius) for $40 million. Tantalum owns a company called Tantalum Rare Earth Malagasy, which in turn holds a rare earths mining concession in Madagascar.
The SGX had queried the firm in July about the plan, raising concerns over the purchase price, as it was seven times the amount paid by the seller, REO Magnetic, just six months before.
The SGX said it was concerned over whether it was "fair and reasonable and in the interests of the company and its shareholders".
ISR's audit committee had responded that the price was fair and reasonable as it had taken into account the market valuation of the asset and technical reports.
However, the bourse operator said the valuation report, prepared by Geologica, did not meet listing rules requirements as it was prepared by a sole proprietor. ISR then appointed Al Maynard & Associates to prepare a new valuation report, and announced last month that it had valued the concession at US$1.1 billion (S$1.6 billion).
ISR also said yesterday it was appointing Mr Chen Tong, a mining and resources veteran, as executive chairman.
In its latest query, issued after the market closed yesterday, the SGX questioned whether the new valuation was done in accordance with listing rules.
It noted that Al Maynard had not conducted a site visit to prepare the valuation report, although the rules require one. The SGX also said the report did not disclose some important information that is required, like a discussion on the data collection, quality control for the mineral resource estimates, or how the mineral resource estimates were derived.
The regulator asked ISR to also disclose whether the cost of mining, processing or refining the rare earths elements had been taken into account in deriving at the US$1.1 billion valuation - or explain why not.
ISR has until tomorrow to respond to the query.