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MHM eyes Guinea bauxite project with AMC merger

15th November 2016

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Melbourne-based MHM Metals has signed a merger term sheet with Bermudan company Alliance Mining Commodities (AMC), which owns a 90% interest in the Koumbia bauxite project, in Guinea.

The proposed merger will be implemented by way of a scrip exchange, at an indicative merger ratio of 15% MHM and 8% AMC, subject to MHM maintaining net assets of no less than A$7-million at the time of signing the transaction documentation.

MHM told shareholders on Tuesday that the proposed merger with AMC provided a unique opportunity to leverage a world-class project off the company’s existing management’s significant experience in developing bulk commodity and infrastructure projects to create a substantial new ASX-listed direct shipping bauxite producing company in the short to medium term.

AMC has spent some $40-million to date on exploring the Koumbia project, as well as completing resource delineation, a definitive feasibility study for a ten-million-tonne-a-year operation, and completing environmental- and social-impact studies.

The company has been granted a mining concession from the Guinea government, and has an agreed mining convention for the development and operation of the mine.

The proposed merger is subject to a number of conditions, including a due diligence, regulatory and shareholder approval, and MHM completing a capital raise to enable the company to comply with the ASX listing rules.

Meanwhile, MHM has also agreed to provide AMC with a loan facility of up to A$1.5-million to enable the company to progress with agreed development activities on the Koumbia project.

Amounts drawn down under the loan facility are repayable at any time up to 12 months from now, with amounts not repaid by that time convertible into AMC shares, at the company’s election.

Edited by Creamer Media Reporter

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