[Ferro-Alloys.com]Almonty Industries Inc. (“Almonty”) (TSXV: AII) Almonty announces that it has signed a binding heads of agreement to sell the Wolfram Camp Mine (“WCM”) in Queensland to ATC Alloys Limited (ASX: ATA) (“ATC”).

 

The proposed consideration for the sale is 120 million fully paid ordinary shares in ATC at a deemed issue price of AUD$0.05 per share, or A$6.0 million (CAD$5.92 million) plus the assumption of intercompany debt owed to Almonty by WCM.

 

The Wolfram Camp Mine is located approximately 130km west of Cairns and has the following key highlights:

• fully-permitted open-pit tungsten mining operation

• high quality mine infrastructure

• commercial production achieved in November 2013

• production of approximately 40,000mtu of tungsten oxide in 2015

• 4-year mine- life with substantial exploration potential

 

Production at the Wolfram Camp Mine is currently on hold pending the completion of the optimization of the milling circuit that is in its final phase of completion. On completion, which is anticipated to be before the end of June 2016, mine production is expected to resume and ramp up to full capacity in a matter of weeks.

 

The proposed sale will diversify Almonty’s operating base and ability to capture synergies across the supply chain.

 

Following the acquisition, Almonty will become the largest shareholder of ATC with an ownership interest of approximately 53% (based on the issue of the consideration shares) and will be entitled to appoint two members to the Board of ATC. The transaction is expected to add significant value to ATC’s strategic goal of developing a diversified specialty metals company.

 

Completion of the acquisition is conditional on:

• completion of due diligence by ATC and Almonty

• finalisation of legal documentation

• ATC shareholder approval

• ATC completing an equity raise of at least AUD$6.0 million

• third party lender approvals

• other statutory, regulatory and other approvals that may be required by the parties.

 

Commenting on the proposed acquisition, Patrick Burke, Chairman of ATC said:`

“The proposed acquisition of Wolfram Camp is clearly aligned with our strategic goal of establishing a diversified specialty metals company. Wolfram Camp is a high-quality asset with near-term production potential and exposure to improving tungsten prices. The combination of the Company’s ferrotungsten plant in Vietnam with the Wolfram Camp would create a significant tungsten mining and down-stream processing business. I look forward to working with Almonty as a strategic partner and drawing on their depth of experience in tungsten operations, marketing and off-take.”

 

Lewis Black, President and CEO of Almonty said:

“Almonty's proposed majority ownership in ATC will provide both Almonty and ATC shareholders with exposure to an expanded tungsten value chain that should enable ATC to attract the enhanced multiples awarded to specialty metal producers. This transaction is a continuation of Almonty’s consolidation strategy and combines the largest Western Tungsten reserve base of Almonty with the largest Western Ferro Tungsten plant of ATC which we expect will maximise value for both our shareholders.”

 

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