JOHANNESBURG (miningweekly.com) – Dual-listed African Eagle Resources on Thursday announced plans to buy Lime-Chem Resources (LCR) for $6-million, less the value of net debts and trade and other payables owed by LCR.

The company, for which AltX and Aim trading was currently suspended, entered into a conditional agreement that would see it own 74% of LCR, with the remaining 26% to be held by a black economic-empowerment partner, which the company was currently seeking.

LCR owned the mining rights over iron-ore assets on the Rooinekke property, in the Northern Cape.

“We believe the proposed transaction has the potential to be transformative for the company, even at the prevailing low iron-ore prices, and we very much look forward to progressing it to completion and will make further announcements in due course,” said CEO Nick Clarke.

African Eagle aimed to raise the acquisition funding through the placing of ordinary shares at 0.275p apiece.

The proceeds would be used to finance the cash element of the acquisition; repay LCR’s creditors; develop further infrastructure at the mine site; and provide general working capital for the enlarged group, the amount of which a further financial due diligence would determine.

African Eagle would process the property’s ore dumps while it assessed the feasibility of restarting mining at Rooinekke.

LCR had entered into sales agreements with Clarke-owned companies Interalloys Trading and Interalloys Trading und Business Consulting Handelsgesellschaft, under which Interalloys Trading provided pre-export financing to LCR.

To date, one shipment of ore had been completed.

The acquisition would constitute a reverse takeover under the Aim Rules for Companies and remained subject to shareholder and regulatory approvals.

The suspension of trade would only be lifted once shareholders approved the deal.