Image by The Library of Congress via FlickrRUSSIAN STEELMAKER OAO Severstal has acquired a 21.7-percent stake in Norwegian miner Intex Resources ASA, a company whose main project is a nickel mine in Mindoro.
The deal, valued at $12.5 million and made through Severstal’s unit Lybica Holding BV, is part of the Russian company’s “diversification strategy into new commodities,” said Boris Granovsky, head of Severstal’s Strategy and Business Development, in a statement posted on the company’s website.
Severstal and Intex said in separate statements that the Russian miner also intended to make a voluntary offer to acquire the remaining Intex shares it did not own.
However, Intex said its board observed that Severstal’s standing offer did not match the value of the Norwegian miner’s mineral assets.
Based on 91.7 million Intex shares outstanding, the company said the proposal valued its equity at approximately $58.3 million.
Intex CEO Erlend Grimstead said earlier that the deposit has a total resource of 2.6 million tons of contained nickel, which lends itself well to processing and is very cost-efficient. Annual production at Mindoro is expected to start in three to four years and is estimated that it will be at 63,000 tons a year.
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