Australia-based copper miner Tiger Resources has entered a share purchase agreement (SPA) and royalty deed with Sinomine Fuhai (Hong Kong) Overseas Resource Investment to sell its assets in the Democratic Republic of the Congo (DRC) for $260m.
The deal will see the sale of Kipoi Project, Lupoto Project and La Patience permit in DRC.
Under the agreement, the total consideration of $260m will include cash payments of $250m and the assumption of liabilities by Sinomine HK amounting to $10m.
Since February last year, Tiger Resources is under voluntary suspension of work due to financial difficulties.
Tiger Resources intends to use the initial cash instalment of $230m to repay its outstanding banking liabilities.
The second instalment of $20m will be paid three months after the initial payment, subject to working capital adjustments.
The deal also entitles Tiger to receive royalty payments generated from the sale of copper and cobalt by Sinomine HK up to an aggregate amount of $20m.
Tiger Resources chairman David Frances said: “The board has been pleased with the progress of the operational turnaround and the rectifications that have been made to improve the performance of the Kipoi operations, as reflected in the recent increase in the tank leach throughput.
“In parallel with this operational turnaround, the company has been considering various strategic options that will allow it to address its balance sheet issues and ultimately realise value for its shareholders.
“After careful consideration of the strategic options, the Board believes this Transaction provides shareholders with the greatest certainty of value realisation and that, on balance, it is in the best interests of shareholders, employees, the Kipoi operations and the future potential of Tiger.”
The transaction, subject to shareholder and regulatory approval, is expected to close by 30 June.
Sinomine has an international network of operations, including existing operations in the DRC and across Africa, and is listed on the Shenzhen Stock Exchange with a market capitalisation of more than $800m.