Mineral resources explorer AsiaPhos Ltd has exercised its call option to acquire a business partner LY Resources Pte Ltd (LYR) for $36.8 million, giving it access to an existing exploration license of barite rocks in Sichuan, China.
The seller of LYR is Luo Yong, who holds a 50% equity interest in Mianzhu Dashan Mining Co Ltd (Dashan), AsiaPhos’ partner in China.
Barite, with its high specific gravity, used as a so-called “weighting agent” in drilling muds, is seeing growing demand from the oil and gas industry.
The acquisition will be paid by issuing 101.32 million new AsiaPhos shares to Luo, giving him 11.2% share of the enlarged share capital of AsiaPhos. The deal will raise the net tangible asset of AsiaPhos to 13.07 cents from 9 cents.
The deal went ahead following an earlier condition that LYR is to achieve a valuation of at least RMB250 million. A June 26 2015 valuation report by Jones Lang LaSalle Corporate Appraisal and Advisory Limited puts the value of LYR at RMB266.58 million.
AsiaPhos CEO Dr Ong Hian Eng notes that the LYR acquisition will improve the company’s operating cash flow, as Dashan’s share of profits from the agreement, recognised as production costs, will not need to be paid following the deal.
As at 10.43 am, AsiaPhos shares trade at 11.8 cents.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
The seller of LYR is Luo Yong, who holds a 50% equity interest in Mianzhu Dashan Mining Co Ltd (Dashan), AsiaPhos’ partner in China.
Barite, with its high specific gravity, used as a so-called “weighting agent” in drilling muds, is seeing growing demand from the oil and gas industry.
The acquisition will be paid by issuing 101.32 million new AsiaPhos shares to Luo, giving him 11.2% share of the enlarged share capital of AsiaPhos. The deal will raise the net tangible asset of AsiaPhos to 13.07 cents from 9 cents.
The deal went ahead following an earlier condition that LYR is to achieve a valuation of at least RMB250 million. A June 26 2015 valuation report by Jones Lang LaSalle Corporate Appraisal and Advisory Limited puts the value of LYR at RMB266.58 million.
AsiaPhos CEO Dr Ong Hian Eng notes that the LYR acquisition will improve the company’s operating cash flow, as Dashan’s share of profits from the agreement, recognised as production costs, will not need to be paid following the deal.
As at 10.43 am, AsiaPhos shares trade at 11.8 cents.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
0 comments:
Post a Comment