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Elemental Minerals receives non-binding and conditional expression of interest

Elemental Minerals receives non-binding and conditional expression of interest

Elemental Minerals (ASX:ELM) has advised that it has received an unsolicited, non-binding, incomplete and conditional expression of interest from Dingyi Group Investment Limited.

The expression of interest is to acquire by way of an off-market takeover the fully paid ordinary shares of Elemental at a cash consideration of A$0.30 per share.

The acquiring entity will be an entity jointly formed by Dingyi, Guangzhou R&F Properties Company Limited and / or its associates.

Elemental said that the proposal is subject to the following pre-conditions:

- Completion of satisfactory confirmatory due diligence;
- The negotiation and execution of pricing and definitive documentation; and
- No material change to Elemental’s number of issued shares.

Additional details

As announced on 11 January 2016, Elemental has signed a non-binding term sheet and entered into exclusivity with SUMMIT Private Equity in connection with a proposed equity investment in the company that will see it sufficiently funded through to the commencement of the construction of its flagship potash project, the Kola Sylvinite Project in the Republic of Congo.

The non-binding term sheet provides for a minimum equity injection of US$50 million at a subscription price of A$0.20 per share into the company.

This cash injection would allow the company to pursue a new strategy accelerating the development of its various Potash projects.

A previous off-market bid by Dingyi in 2013-2014 lapsed after the Hong Kong Stock Exchange determined the bid to be a reverse take-over and that Elemental did not meet the (then) new listing requirements for mineral assets under Chapter 18 of the SEHK Listing Rules.

Elemental commented:

"Dingyi have not provided Elemental with sufficient comfort that this is no longer the case.

"As the proposal from Dingyi has no guarantee of completing and the consideration is significantly below both the fundamental value of the company and the value that could be created under the Summit proposal, the board has rejected Dingyi’s proposal and has advised Dingyi that Elemental cannot have any discussions due to the current exclusivity with SUMMIT.

"The Summit process is progressing well and the Board hopes to be able to provide a more detailed update to shareholders in the near future."


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