Sending its share price down 14 percent in morning trade to $0.3, explorer Metminco has bailed on its acquisition of the Jejevo Nickel Project in the Solomon Islands. Since signing an agreement to buy private company Sunshine Minerals, Metminco (ASX: MNC) had been undertaking ‘due diligence’ on the project which holds an 80 percent of Jejevo — in September.
Metminco told investors that the company was unable to complete due diligence to the required level while continuing to believe the project was attractive and has given notice of its withdrawal from the agreement. It announced to fund the acquisition the explorer no longer needs to raise up to $2.5 million and was “the details of which will be announced to the market shortly it is working towards a new funding strategy”.
The company which completed a feasibility on the project in 1972 but never moved to production, Jejevo was owned by mining giant BHP. When legal disputes and a low nickel price saw it leave the Solomon Islands completely, it was also held by Japanese giant Sumitomo Metals Mining up to about 2016. Discussions with major gold miner AngloGold Ashanti in Colombia, Metminco still has its Chuscal gold project, are well advanced to formalize a farm-in/joint venture agreement.
To acquire Sunshine Minerals Limited, the Company announced that it had entered into an agreement on 19 September 2018. The Company has been progressing its investigations since that date, the acquisition is subject to satisfactory completion of due diligence.
As set out in the announcement of 19 September 2018, the Company intends to seek shareholder approval to issue the Placement Options, at the next available opportunity. The company is working towards a new funding strategy, the details of which will be announced to the market shortly.
Minera Hampton Peru SAC, Minera Hampton Chile Limitada, and owns the Mollacas Projects, Vallecillo and Loica Projects are company’s subsidiaries. The stock is trading at a 52-week low and has witnessed a performance change of -88.82% over the past 12 months and declined -12.50% over the past one month. The market capitalization of the company is $3.14 million.
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