22 Jul 2009 09:32

NWME to acquire 45 pct stake in Meridian

Shanghai. July 22. INTERFAX-CHINA - State-owned Northwest Mining and Geology Group Co. Ltd. for Nonferrous Metals (NWME) has entered into an agreement to acquire a 45 percent stake in Australian Securities Exchange-listed Meridian Minerals Ltd., the Australian metals explorer announced on July 22.

According to the agreement, Meridian will issue 131.25 million new shares to NWME at a per-share price of AUD 0.08 ($0.07) in order to raise AUD 10.5 million ($8.57 million).

Meridian said it will plow the funds into the development of the Lennard Shelf Project in north Western Australia, which it intends to purchase in the near future. The project's current owner, Lennard Shelf Pty Ltd., recently granted Meridian an extension until Aug. 19, 2009 to finalize all relevant legal documents for the acquisition.

The NWME-Meridian deal is still subject to approvals from Australia's Foreign Investment Review Board, the Chinese government and Meridian shareholders, as well as the completion of the acquisition of the Lennard Shelf Project.

Meridian directors will unanimously recommend the deal to its shareholders, the company said.

The Lennard Shelf Project is a lead and zinc deposit containing 41 million tons of resources. The lead resources have a grading of 3.2 percent and the zinc resources have a grading of 7.9 percent, according to an NWME announcement.

NWME is one of the top five exploration and mining bureaus in China. NWME has been actively involved in overseas investment and has exploration projects in countries including Mongolia, Argentina, Indonesia, Guinea and Canada.