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Highlights:
- CZR Resources (ASX:CZR) has faced another delay in finalizing the $102 million sale of its Robe Mesa Iron Ore Project, with the Foreign Investment Review Board (FIRB) yet to grant approval after 12 months.
- The prolonged delay has resulted in the exclusivity agreement with Chinese buyer Frank Yin and Miracle Iron being lifted, raising concerns over the transaction's completion.
- The uncertainty has impacted investor sentiment, with CZR’s shares reacting negatively to the announcement of the continued delay.
CZR Resources (ASX:CZR) has announced a further delay in the sale of its Robe Mesa Iron Ore Project, a deal valued at $102 million. The transaction, which involves Chinese businessman Frank Yin and his Perth-based company Miracle Iron, remains pending approval from the Foreign Investment Review Board (FIRB). This setback marks a full year since the process began in January 2024, leaving the sale in limbo.
FIRB Approval Issues
CZR Resources has been working to fulfill FIRB approval conditions for the Robe Mesa transaction since early 2024. Stefan Murphy, the company’s managing director, recently indicated that final approvals had been anticipated by the end of November, yet the delay persists.
Murphy expressed frustration over the lack of clarity provided by FIRB regarding the delays, calling the situation a “bureaucratic abyss.” Despite repeated inquiries, the board has not offered a timeline or guidance, creating uncertainty for both CZR Resources and the potential buyer.
Buyer Interest Impacted
The prolonged approval process has shaken the interest of Frank Yin and Miracle Iron. In light of the delays, both parties agreed in November to terminate the exclusivity obligation within their agreement. With the current sunset date for the deal set for January 24, 2025, concerns are mounting that Yin and his team may pursue alternative opportunities if FIRB approvals are not secured soon.
Market Reaction
The extended delay has not been well received by investors. CZR shares, which initially surged by 42.9% to $0.30 following the deal's announcement in January, experienced a sharp decline in response to the latest news. While shares saw a brief uptick of 2.6% last week, the continued uncertainty has overshadowed earlier optimism.
A Prolonged Road Ahead
The Robe Mesa Iron Ore Project represents a significant transaction for CZR Resources, but the extended timeline for FIRB approvals has cast doubts on the deal's viability. With the January 24 sunset date approaching, the coming weeks will be crucial in determining whether the sale can proceed or if alternative strategies will need to be considered.
