(Alliance News) - Zanaga Iron Ore Co Ltd on Wednesday said it has acquired Glencore Projects Pty Ltd's controlling shareholding in the Zanaga iron ore project, based in the Republic of Congo.
Shares in Zanaga were trading 20% higher at 4.00 pence in London on Wednesday morning.
The iron ore miner focused on Republic of Congo said it reached an agreement with Glencore Projects to acquire its 50% plus one share interest in Jumelles, an entity that indirectly holds the project's mining licence.
Glencore Projects is a 100% owned subsidiary of Swiss-based miner Glencore PLC.
Subject to shareholder approval, Zanaga will issue 286.3 million new Zanaga shares to Glencore Projects to complete the acquisition. This represents a 48% stake.
Glencore Projects will have the right to appoint two non-executive directors to Zanaga's board. It has agreed that, except in "limited circumstances", it will not dispose any of its shares in Zanaga in the six months following admission without the consent of Zanaga.
Glencore Projects also agreed to amend the terms of a previously agreed loan arrangement for the project. It increased the amount to USD1.8 million from USD1.2 million and extended the repayment date to December 31 2023.
Zanaga Non-Executive Chair Clifford Elphick said: "The acquisition of Glencore Projects' shareholding in the project is a key milestone for ZIOC's shareholders, demonstrating to third party investors that the project is now represented by a single entity and management strategy. The acquisition is value accretive to shareholders and increases effective equity ownership of the project by existing shareholders, enhancing their look-through ownership of the project and securing control of the project without paying any premium for such interest."
By Chris Dorrell; chrisdorrell@alliancenews.com
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Zanaga Iron (ZIOC)
Glencore (GLEN)