Denham terminates $42m takeover of Australian miner

In March, the private equity firm, operating under its Tremont platform, had proposed to purchase 100% of the company's shares at A$0.33 apiece. The stock jumped about 50% after the offer and has since remained in a range of A$0.32-0.33. It was trading at A$0.32 as of mid-morning on June 5.

According to a filing, Denham terminated the acquisition following unfavorable changes to mineral export laws in Tanzania, where Cradle operates its flagship project known as Panda Hill. Denham is already a 19.6% stakeholder in the operation, which focuses on delineating economic quantities of the steelmaking ingredient niobium.

High-strength alloys made from niobium are used in jet engines, gas turbines, rocket subassemblies and turbocharger systems. Panda Hill is considered a unique development project due to its proximity to local transport infrastructure, including a rail line, airport and highway to the port city of Dar es Salaam. The estimated initial construction cost for the project is $196 million, excluding working capital.

Tremont is an Africa-focused division Denham established in 2011 alongside South African minerals company Pangea Exploration. Denham provided $200 million in seed funding. The resources-focused GP has made similar platform-style investments in the likes of Pembroke Resources and Auctus Minerals as well as Nexif Energy, which invests in renewable power in Southeast Asia.

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• Topics
• Australasia
• Industrials
• Buyouts
• Australia
• Africa
• Commodities
• Denham Capital
• resources