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ARMZ makes A$1.16bn offer for Mantra

Publishing Date
20 Dec 2010 12:25pm GMT
Author
Mining Journal
Russian uranium producer JSC Atomredmetzoloto (ARMZ) has agreed to pay A$1.16 billion (US$1.15 billion) in an all-cash purchase for Australian-based Mantra Resources Ltd.

ARMZ, a subsidiary of nuclear holding company Rosatom Corp, will pay A$8/share for Mantra, which is a 5.5% premium to the company’s trading price before its shares were halted on the ASX.

A successful takeover of Mantra would provide ARMZ with access to the company’s Tanzanian assets, including the flagship Mkuju River project.  

Vadim Zhivov, ARMZ director general, described Mkuju River as a world-class deposit. He said: “We believe Mantra will complement our portfolio of assets, and is consistent with our stated strategy of acquiring low cost, long life, geographically diverse assets.”

A successful acquisition would also augment ARMZ’s US$610 million takeover of Canada’s Uranium One Inc in June.
Subject to confirmation by an independent expert’s report, Mantra’s board has recommended the deal to shareholders.

Peter Breese, Mantra chief executive, said: “This clean, all-cash offer from ARMZ is compelling and reflects both the strategic significance of this asset (Mkuju River) as well as the current status of the project against the backdrop of a recent spike in the uranium price.”

Mantra’s strategic shareholder, 13.5% owner Highland Park SA, has already indicated it would vote in favour of the deal, the company added.

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