China’s largest lead producer will buy a 15% stake in Kimberley Metals as well as take a 25% share of the company’s Sorby Hills project in WA.
Kimberley (KBL) shares jumped more than 1.5 to 26c yesterday, a rise of 1.5c on the day, after news of the Chinese investment was released.
The shares relisted yesterday after a trading halt, announced last Friday, was lifted.
Kimberley said that Henan Yuguang Lead and Gold Co Ltd (Yuguang) would acquire 20.8 million new Kimberley shares at a price of 25 cents per share, or 15% of its expanded capital.
Shareholders in Kimberley will meet on a yet to be determined date to vote on the proposed placement.
The Chinese firm also will take a 25% stake in Kimberley’s Sorby Hills lead, silver and zinc project near Kununurra by contributing $5 million to bring feasibility studies to completion.
"Yuguang will be entitled to a percentage of all minerals products produced by the project at market terms," Kimberley said in the statement.
"This percentage shall be equivalent to the sum of the direct interest in the project and the proportional interest through the equity in KBL (Kimberley)."
Kimberley said Yuguang could earn an entitlement to a higher portion of minerals produced at the project by helping to raise funds to bring it into production.
Yuguang will be entitled to a percentage of all mineral products produced by the project at market terms.
This percentage shall be equivalent to the sum of the direct interest in the project and the proportional interest through the equity in KBL.
Yuguang will have the right to earn entitlement to a higher portion of the mineral produced on the condition of providing assistance satisfactory to KBL in raising funds to bring the project into production.
Kimberley chairman, Jim Wall, said the deal was Yuguang’s first overseas investment.
"Having the support of a major metal producer is a significant boost to the development of Kimberley’s projects," Mr Wall said.
"This transaction will allow Kimberley Metals to simultaneously pursue the feasibility study on Sorby Hills and accelerate the commissioning of Mineral Hill gold project."
Kimberley’s wholly owned Mineral Hill project is near Parkes in NSW.
