7 May 2010 11:17

Tibet Mineral to raise $220 million through share issuance

Shanghai. May 7. INTERFAX-CHINA - Shenzhen Stock Exchange-listed Tibet Mineral Development Co. Ltd. announced on May 7 that it plans to issue approximately 68.7 million new non-public shares to raise up to RMB 1.5 billion ($220.3 million).

According to the announcement, the company will sell the shares to no more than 10 investors. These include its parent company, the Mining Development Company of Tibet Autonomous Region, which has committed to buy at least 17.69 percent of the newly issued shares at a per-share price of RMB 21.89($3.21).

The funds raised will be mainly used to finance the company's three lithium projects in Tibet. Meanwhile, RMB 490 million ($71.77 million) will be used for technical upgrades at the company's refined copper production facility in Nimu County, Tibet, which is expected to expand its annual production capacity to 6,500 tons.

Tibet Mineral Development is mainly focused on chromite resources exploration and development. The announcement noted that the company is trying to diversify, as the chromite sector is heavily influenced by the downstream steel industry.

The company's share price closed at RMB 26.42 ($3.87) in Shenzhen on May 7, down 3.93 percent from the previous trading day.