14-3-2018
Stellar Diamonds has agreed with the all-share takeover of US$10.8 million offered by its Australian rival Newfield Resources.
Under the acquisition, Newfield will loan Stellar US$3 million to ease its short-term cash needs while undertaking a rights issue to raise US$30 million to re-finance the enlarged group. Stellar shareholders will receive 0.76 Newfield shares for each Stellar share they hold. The boards of Stellar and Newfield believed the tie-up will create the potential for generating long-term value for the shareholders of both companies
The mining minnow has struggled in recent years to raise enough money to finance its Tongo-Tonguma project in Sierra Leone. “The enlarged company will have the financial and technical capacity to deliver the project, which we believe can offer long-term and sustainable cash flows to all shareholders,” said Stellar CEO Karl Smithson, who will join the board of Newfield.
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