LONDON (Alliance News) - StartMin Global Resources PLC Thursday said it hopes shareholders will approve the deal to sell its flagship project to its partner so it can retain exposure to the asset at a significantly lower cost.
Stratmin currently holds an 93.75% stake in the Graphmada Mauritius subsidiary which owns all of its assets in Madagascar, but partner and owner of the remaining stake, Bass Metals Ltd, is in the process of buying the entire project.
Stratmin is being paid partly in shares, meaning it will have a holding in Bass Metals if the deal goes ahead, retaining exposure to the asset. Shareholders will vote at a meeting on July 29.
"At the completion of this transaction, StratMin will have a holding in Bass that will have a lower cost of capital and a better funding platform to undertake the necessary refurbishment and expansion of operations in Madagascar," said the company.
"It will also strengthen the StratMin balance sheet and position the company to pursue the other projects such as Vatomaina and broader diversification into the renewable energy and energy storage industry, which is a growing consumer of graphite," StratMin added.
The graphite producer operating in Madagascar reported a GBP2.2 million pretax loss in 2015 compared to a GBP2.4 million loss in the previous year.
Other key performance indicators included the net asset value, which fell 12% year-on-year to GBP5.4 million from GBP6.2 million, and the NAV per share, which fell 34% to 3.89 pence from 5.55 pence.
StratMin shares were up 21% to 1.66 pence per share on Thursday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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