Post a comment
Sierra Rutile, a mining company focused on mineral sands in Africa, is facing a A$40 million takeover bid from investment group PRM Services.
This comes amidst operational challenges for Sierra Rutile, including a recent suspension of mining activities. However, the company issued a cautionary statement to its shareholders on Wednesday, urging them to refrain from taking any immediate action concerning an unsolicited takeover offer valued at A$40 million
PRM Services has proposed to acquire all outstanding Sierra Rutile shares at a price of A$0.095 per share. Currently, PRM holds an interest and voting power equivalent to approximately 11.46% of Sierra Rutile’s shares. News of the bid significantly boosted Sierra Rutile’s share price on the ASX, surging by 34% to A$0.10 per share.
Under the leadership of Gerald Group CEO Craig Dean, PRM Services is recognized as an investment firm with a global footprint, notably active in Africa’s commodity sector, with a focus on critical metals and minerals.
In its bidder’s statement, PRM Services expressed confidence in Sierra Rutile’s potential to thrive as a profitable operating company, given the right guidance, strategy, and resource allocation. The statement underscores PRM’s established expertise in mining operations and development in Africa, including Sierra Leone.
Sierra Rutile recently made headlines by suspending all mining and processing operations at its Area 1 site, resulting in a reduction in staff by approximately one-quarter. This decision was prompted by persistently challenging market conditions and uncertainties surrounding the fiscal regime applicable to Area 1 operations.
The company is currently engaged in negotiations with the Sierra Leone government to finalize a fiscal regime that would support continued production, contingent upon favorable market conditions. Failure to reach an agreement with the government could potentially lead to the complete closure of operations at Area 1.
In addition to its Area 1 operations, Sierra Rutile also holds the Sembehun project, with the outcomes of a definitive feasibility study expected to be announced in April.
