Base Resources has signed a $75m agreement to acquire an 85% interest in the Toliara Sands project in Madagascar.
Under the deal, Base Resources agreed to initially purchase an 85% stake in the wholly owned Mauritian subsidiaries of World Titane, which collectively hold 100% interest in the project.
The acquisition is dependent on Base Resources raising equity for a minimum of A$80m ($61.31m) to meet a portion of the expenditure needed to fund the acquisition.
The project is supported by the Ranobe deposit, which has a joint ore reserves committee (JORC) 2012 resource of 857 million tonnes, including 612 million tonnes in the measured and indicated categories.
As part of the deal, Base Resources will acquire the remaining 15% interest in exchange for an additional $17m payable on achievement of certain milestones during mine development.
Base Resources managing director Tim Carstens said: “World Titane has invested significantly in progression of the Toliara Sands Project over a number of years, establishing a world-class mineral resource, advancing development studies and securing key permits and licences.
“The majority shareholders in World Titane, AMED Funds and Boulle Titanium, who have been instrumental in the recent project progression, have committed their ongoing support to the project to ensure a continued smooth progression to mine development.
“This is a transformational acquisition for Base Resources and represents a significant step in execution of the company’s strategic plan.”
To arrange funding for the acquisition, the company will raise capital funding of A$100m ($76.64m) through a partially underwritten share placement and accelerated pro-rata renounceable entitlements offer.
Based on Base Resources’ development plan, the project is expected to be brought into production in mid-2021.
The company intends to begin construction in the second half of 2019.