Investment company International Mining & Infrastructure (IMIC) has submitted a bid to acquire Afferro Mining, a Canadian mining company with a focus on West-Africa, valuing the iron ore development firm between £105m and £147m.
The proposal has been made to acquire the entire issued and to be issued share capital of Afferro, and is subject to the successful raising of funds, the negotiation of a Plan of Arrangement and the completion of the required documentation for a reverse takeover.
In its proposal, IMIC has provided Afferro shareholders three options for receiving consideration in respect of their shares – £0.80 in cash plus a convertible loan note of £0.20, representing a total of £1 for each share; £0.50 in cash plus a convertible loan note of £0.70, representing a total of £1.2 for each share; and shares in IMIC equivalent to a valuation of £1.4 for Afferro share.
The cash portion in these options will be subject to a limit of $100m.
Afferro, which holds a 100%-stake in its flagship asset, the Nkout iron ore project, has been in discussions with several investors since late 2012.
IMIC initially approached Afferro in December 2012, with plans to submit a takeover bid of between £1.15 and £1.40 per Afferro share .
The investment company already owns about 5% of Afferro Mining, according to Reuters data.
IMIC chairman Haresh Kanabar said that the company has carried out wide due diligence on Afferro, which is developing a portfolio of iron ore projects in Cameroon including its flagship Nkout project, which consists of high quality magnetite.
"We are delighted we are progressing our plans to acquire Afferro, which we believe if completed will add considerable value for our shareholders as well as being attractive to Afferro shareholders," Kanabar added.
Meanwhile, IMIC has signed strategic partnerships with two major Chinese state owned enterprises in connection with an infrastructure and offtake solution for the Nkout iron ore project.
According to the company, the solution will have the potential to open up the significant iron ore corridor running through Cameroon.
Image: Afferro’s Nkout iron ore project in Cameroon consists of high-quality magnetite. Photo: Benjamint444.