Elemental Minerals Teams Up with India’s Shapoorji to Invest in Congo

Elemental Minerals Teams Up with India’s Shapoorji to Invest in Congo

Elemental Minerals teamed up with an international infrastructure company that seeks to provide construction consulting as well as A$19.3 million in equity funding for the development of the Sintoukola potash project in the Republic of Congo. The non-binding term sheet was signed with India’s Shapoorji Pallonji Group, which has more than 150 years of experience in construction and infrastructure of various facilities, such as ports and power stations as well as minerals projects. The company has a very strong presence in Africa and its annual turnover is more than US$3.3 billion.

The deal between Elemental and Shapoorji will fully financially cover the feasibility study for the project’s Kola sylvinite deposit including the prefeasibility study of the planned Dougou mining area. Elemental’s projects will also draw upon the work and expertise of Shapoorji engineers. Both studies are expected to support the construction that should start by the second quarter 2017. CEO John Sanders commented that Elemental “was extremely pleased to have attracted Shapoorji Pallonji as a potential strategic partner to the company including the infrastructure build ability it brings to the Kola project. He added that “this new partnership will allow the company access to Shapoorji Pallonji’s broad based infrastructure build experience and the skill set associated with this aspect, which is an important element for the company’s development going forward.”

The project will provide for a $19.3 million investment into Elemental Minerals through the placement of 101.6 million new Elemental shares at $0.19 per share. The total investment will account for almost 20 percent shareholding in Elemental by Shapoorji. The value of Elemental shares has increased by more than 70 percent since August. The new strategic partnership will now be scrutinized for final due diligence. Both sides will also agree on the final documentation and the transaction has to be approved by Shapoorji investment committee and by Elemental shareholders for the issue of additional share capital. It is expected that all these steps will require 15 weeks to complete.

Share