Chinese nickel producer takes WA stake
March 31, 2008 - Posted in Lead Mining, Nickel Mining, Zinc MiningChina’s largest nickel producer, Jinchuan Group Ltd, has taken a 11 per cent equity stake in Perth-headquartered nickel explorer and producer Fox Resources Ltd.
The news sent Fox shares north, up 15 cents, or 30.93 per cent, to 63.5 cents at 1229 AEDT on Monday.
Jinchuan secured statutory approvals from the Chinese Government and the Provincial Government of Gansu Province to subscribe for 18.8 million ordinary shares in Fox at an issue price of 95 cents.
It announced its intentions to do so on January 9.
The share issue and funds transfer are expected to be completed within the next fortnight.
Jinchuan will be issued a further eight million attaching options exercisable at $1.20, expiring 12 months after the issue of the ordinary shares.
The funds raised from the issue will be applied to development of Fox’s nickel projects in Western Australia’s Pilbara region, process improvements to its Radio Hill mill and the acceleration of nickel exploration.
On finalisation of the initial share issue, a Jinchuan representative will be invited to join Fox’s board.
In January, wealthy mining figure and Fox chairman Terry Streeter, who is also the chairman of nickel producer Western Areas NL, said Jinchuan’s subscription of shares at a premium was a major endorsement of Fox’s landholdings and operations.
Jinchuan is the major shareholder in nickel miner Allegiance Mining NL, which was recently taken over by lead and zinc miner Zinifex Ltd, which in turn plans to merge with gold and copper producer Oxiana Ltd.
Jinchuan has indicated it plans to hold on to its 10.4 per cent stake in Allegiance, giving it a minority shareholding in a merged Oxiana and Zinifex, and gaining exposure to these companies’ combined lead, zinc, gold and copper assets.
