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Stratmin Global to go ahead with sale of business to Bass Metals

Published: 08:33 26 May 2016 BST

Picture of man holding money to represent sale of business
Stratmin will be shell company following Graphmada's disposal

StratMin Global Resources Plc (LON:STGR) is to sell its graphite business in Madagascar, Graphmada, to Australian firm Bass Metals.

Bass has completed due diligence and a sale and purchase agreement is being negotiated, Stratmin said.

The proposed consideration is A$15.25mln for the outstanding 93.75%, which values Graphmada overall at A$16.3 mln or approximately £8.0 mln. That is just below the price indicated when the deal was flagged last month.

“This is, in the board's opinion, a compelling valuation in comparison with the current market capitalisation of StratMin [£3.5mln]” said the company.

It will leave Stratmin as a shell company with six months to find a new business or be de-listed from AIM.

The consideration is payable in stages: A$1.5mln (£735,000), in cash immediately; A$8.75mln in Bass shares in 3 tranches: and a net smelter royalty of 2.5% capped at A$5mln.

Bass has appointed Bizzell Capital Partners and Patersons Securities, two Australian based brokers that specialise in financing graphite projects, to assist with raising funds for the acquisition of Graphmada.   

“The board has considered the proposed disposal and the alternatives for funding the development of operations and believes that placing funding control under Bass, with operational support from StratMin and Tirupati, gives shareholders the best available development proposition.”

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