Higher, All-Cash Offer Emerges for Sierra Rutile

ASX-listed Sierra Rutile announced a new offer for the company on Monday – the third in the past four months – with majority shareholder Lenoil stepping forward.

Lenoil, which holds a 19.85% stake in Sierra Rutile, has made an all-cash offer for the company that tops Gemcorp Commodities’ recent offer of A$0.16 per share.

“Lenoil’s offer is all cash, has no minimum acceptance threshold and is 12.5% ​​higher than Gemcorp’s offer and 90% higher than PRM Services’ offer of A$0.09 per share announced earlier in March,” Sierra Rutile chairman and non-executive director said. Gregory Martin.

The Board considered PRM’s offer to be opportunistic, having been announced just prior to the publication of Sembehun’s definitive feasibility study (DFS) and during a temporary suspension of operations.

In early July, Sierra Rutile’s board recommended that Gemcorp make a significantly higher offer. Now, Lenoil’s higher offer has emerged, and the directors have recommended that shareholders accept.

“Lenoil’s offer better reflects the highly strategic nature of SRX’s existing operations in Area 1 and the importance of the Sembehun project, as confirmed by the feasibility study published in April,” Martin said.

The feasibility study highlights a series of key results, underlining the transformative impact of the Sembehun project. The mine life is estimated at 14 years and the ore reserve is 173.7 million tonnes at 1.46% rutile.

An annual production rate target of approximately 14.4 million tonnes of mined ore is planned, allowing for an average steady-state production of 175,000 t/yr of rutile.

The expected return on investment is anticipated within 55 months of project start-up, with a real net present value after tax, using an 8% discount, of $408 million and an internal rate of return of 27.8%.