4th Aug 2014 08:14
LONDON (Alliance News) - Kennedy Ventures PLC Monday said it has bought a 75% stake in African Tantalum (Pty) Ltd for GBP0.7 million in cash and shares, a company that has a conditional deal to buy a majority stake in a tantalite mine in Namibia.
Tantalum is mainly used in the electronics industry, where tantalum capacitors are used in electronic equipment such as mobile phones, tablets, laptop computers and video game systems. It is also used to produce a variety of super alloys which can be used to manufacture high temperature cutting tools and other applications where its high melting point and corrosive resistant properties are required.
Aftan has a conditional deal with Magnum Mining and Exploration Ltd to acquire 60% of the Tantalite Valley project in Namibia, a mine which it is intended will be brought back into production of tantalite, used in the production of tantalum, within six months of completion of Kennedy's purchase of the majority stake in Aftan.
Kennedy Ventures, currently classified as an investing company under AIM rules, said it will pay GBP0.2 million of the purchase price by issuing 4.5 million of its shares to the sellers, a group of private investors, at 4.9 pence a share. The rest will be paid through a loan of GBP0.4 million.
Some of the world's tantalum is produced in the Democratic Republic of the Congo, and has therefore been deemed to be from a conflict zone. The US Securities and Exchange Commission is requiring companies to disclose the origin of tantalum.
"It is intended that the tantalum produced by Aftan would be conflict-free and the company would anticipate that a premium to tantalum from conflict areas could therefore be charged," Kennedy Ventures said in its statement.
"This is the first step in our intention to build Kennedy Ventures into a Namibian based producer of the highest grade of tantalum, which when certified, is a highly valuable commodity given its use in nearly every modern electronic device," Kennedy Venture Chairman Giles Clarke said.
"Its origin matters to end users such as the world's large electronics companies due to their desire to comply with the US regulations on the use of tantalum. We intend to build upon this initial mine and utilise wide ranging international financing options to create significant value for shareholders in a fully integrated business," he added.
Aftan's deal with Magnum is conditional on confirmation of mining tenure at the project, currently being reviewed by the Namibian government, and regulatory approvals.
Kennedy Ventures shares were up 9.4% at 5.20 pence Monday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Kennedy Ventures