JOHANNESBURG (miningweekly.com) – London-listed Kenmare Resources has received a revised, nonbinding proposal from Australian mineral sands miner Iluka Resources regarding the proposed buyout of the Irish miner.

In its latest proposal, Iluka offered Kenmare shareholders 0.016 Iluka shares for each Kenmare share.

This was lower than its previous offer of 0.036 Iluka shares for each Kenmare share held, which the heavy minerals miner, in June 2014, said did not recognise the value inherent in the Moma project as a long-life, low-cost asset.

The proposed deal was subject to a number of preconditions, including the receipt by Iluka of such consents and determinations from relevant authorities and the Mozambique government as may be required to effect the possible acquisition; written determination from the Mozambique tax authority of the amount of any capital gains tax; written confirmation from Kenmare's lenders on the specific terms of repayment of Kenmare's outstanding indebtedness upon a change of control of Kenmare; receipt of irrevocable undertakings of support from the Kenmare board and certain Kenmare institutional shareholders; and final approval from the Iluka board.

The Kenmare board noted in a statement to shareholders that it had carefully reviewed the proposal and, considering its financial position, prevailing market conditions and the terms of the debt amendment believed that it was in Kenmare shareholders' and other stakeholders' interests for the company to continue to work with Iluka towards satisfaction of the preconditions.

Analysts at SP Angel noted that, given the persistent operational problems and the indebtedness of the group, the announcement would be good news for shareholders.

“While the offer is on paper, shareholders have the liquidity to get out and also the option to stay in against an improving trend in the end markets. This also makes Sierra Rutile an interesting option to consider for funds restricted to holding UK shares,” it noted.

Kenmare’s share price on the LSE rose 22.26% on Thursday morning.