International Base Metals bags funds from Heilongjiang Heilong

16 December 2012 (Last Updated December 16th, 2012 18:30)

International Base Metals has secured funding from China's Heilongjiang Heilong Resources Investment to help expand its mining operations and exploration activities in Namibia.

International Base Metals has secured funding from China's Heilongjiang Heilong Resources Investment to help expand its mining operations and exploration activities in Namibia.

IBML and Heilong signed a binding subscription agreement, wherein the Chinese firm will subscribe for A$30m ($31.61m) of share capital IBML for a price of 20 cents a share.

The firm plans to use the proceeds to establish an Omitiomire Phase 1 oxide copper mining and processing operation and expand the Omitiomire resource and regional drilling in Namibia.

The transaction will be completed in two tranches - the first payment of $15m will be made on or before 15 March 2013 and the second $15m payment is due on or before 14 June 2013.

Heilong currently owns a 6.3% interest in IBML, while West Minerals holds a 30% interest.

Heilong is a related party of West Minerals and the transaction's closure brings the combined ownership of both companies in IBML to 53.9%.

IBML managing director Frank Bethune commented on the deal, "We believe that together the funds from Heilong and their expertise in bringing mines into production will be an impetus for driving value for all IBML shareholders," Bethune said.

The transaction is subject to the approval of IBML shareholders not associated with Heilong or West Minerals, the voting of which has been scheduled for January 2013.

The deal also requires approval under the Foreign Acquisitions and Takeovers Act and from the Chinese government agencies.