- Lindian Resources (LIN) reaches an out-of-court settlement on its proposed acquisition of up to a 75 per cent interest in the Kangankunde rare earths project in Malawi
- Under the terms of settlement, the parties agree to discontinue the proceedings in exchange for Lindian receiving a 60-day exclusivity period
- During the period, the company will seek to negotiate the terms of a legally-binding transaction
- The transaction will allow Lindian to acquire a 100 per cent interest in Rift Valley Resource Developments and its Kangankunde project
- LIN shares are up 23.1 per cent, trading at 4.8 cents as of 10:58 am AEST
Lindian Resources (LIN) has reached an out-of-court settlement relating to a dispute of its proposed acquisition of a 75 per cent interest in the Kangankunde rare earths project in Malawi.
Under the terms of settlement, the parties have agreed to discontinue those proceedings in exchange for Lindian being provided a 60-day exclusivity period during which the company will seek to negotiate the terms of a legally-binding transaction.
The transaction will allow Lindian to acquire a 100 per cent interest in Rift Valley Resource Developments — owner of the Kangankunde project.
Lindian Chairman Asimwe Kabunga said he is pleased to have reach a settlement as it was a “significant ongoing distraction” to the company’s activities.
“The terms of settlement provide Lindian with a period of exclusivity within which to seek to agree the terms of a binding transaction in respect to the acquisition of the Kangankunde rare earths project,” Mr Kabunga said.
The company, however, warned that there can be no guarantee that any transaction will eventuate at this stage.
To assist with the negotiation of the share purchase agreement between the parties to give effect to any transaction, the terms of settlement reflect a proposed purchase consideration of US$30 million (A$42.25 million), payable in tranches.
The first tranche will be a US$2.5 million non-refundable deposit upon the parties entering into a legally-binding share purchase agreement, with all necessary approvals.
The second, third and fourth tranche will be a payment of US$7.5 million, US$10 million and US$10 million to be paid six months, 12 months and on the commencement of commercial production at Kangankunde, respectively.
The terms of settlement also allow Lindian to have the option of paying the tranches
sooner than the dates above in order to accelerate the completion of each phase of the proposed transaction.
LIN shares were up 23.1 per cent, trading at 4.8 cents as of 10:58 am AEST.