MELBOURNE, Australia--(BUSINESS WIRE)--Fortis Mining (ASX:FMJ) www.fortismining.com.au is pleased to announce that it has finalised negotiations to fully secure the rights to purchase two significant potash salt deposits in west-Kazakhstan.
The Chelkar and Zhiliyanskoe Salt Deposits have an exploration target range of 6.5 – 6.6 billion tonnes of potassium deposits, making them amongst the largest potash salt deposits in the world.
The Chelkar Salt Deposit also has an exploration target range of 102 – 105 million tonnes of magnesium deposits.
Fortis Mining has agreed to acquire the rights for a total cost of $US260 million. The payments will be made in three tranches - $US6 million has already been paid, a second installment of $US24 million is due on April 18, with the remainder ($230 million) due on July 7.
The acquisition of the assets has been secured through a variety of share sale agreements that will result in Fortis acquiring 75 per cent of the Hong Kong based Ji'an Resources – which owns the two deposits through a number of indirect shareholdings.
The acquisition of Ji'an Resources involves the transfer of 40 million company shares in Fortis and $1 million cash payment.
The Executive Chairman of Fortis Mining, Jitto Arulampalam, says today's announcement illustrates that Fortis Mining will soon become a major mining company on the world stage.
"Fortis Mining is very excited by the future prospects of these two mines to service the growing demand for potash ore, especially in China and India which are geographically located near Kazakhstan," he said.
"Fortis is undertaking further due diligence on the deposits, but we are confident that there is only limited investment and time needed to make the first of these deposits – the Chelkar Salt Deposit – operational." he said.
"Already Fortis has shown in a reasonably short period of time that it can secure world class assets and reward its shareholders. We have a range of funding options available to complete the transaction of securing these two mines," Mr Arulampalam said.
While completion of the transaction remains subject to shareholder and regulatory approval, Mr Arulampalam was confident that such approvals would be forthcoming over the coming months.
For more information please refer to the ASX announcement or contact:
Jitto Arulampalam, +61 (0) 421 617 766