Canada firm acquires stake in Coast minerals venture

Canada-based minerals and metals firm Pacific Wildcat Resources has said it has completed acquisition of stake in a rare earth and niobium project near Mombasa.

The company said it took over Stirling Capital Limited Cortec (Pty) Ltd and indirectly acquired a 70 per cent interest in Cortec Mining Kenya Limited, the owner of the Mrima Hill niobium and rare earth project.

“The completion of the acquisition is a watershed moment for the firm. We would like to thank all stakeholders for their patience,” Pacific Wildcat President Darren Townsend said in a statement.

Pacific Wildcat said it issued to Finebrook Investments Pty. Ltd as trustee for the transaction vendors an aggregate of 92.59 million common shares of PAW shares at a redeemed price of Cdn$0.11 (Sh9.35)per share and to the vendors convertible promissory notes amounting to Cdn$775,000(Sh65.8million).

“All securities issued to the vendors on the final closing are subject to a hold period expiring on January 13, 2013,” the company said.

The firm said it had also arranged a total of $3 million (Sh252million) in debt financing concurrently with the closing of the acquisition by way of a non-revolving secured credit facility amounting to $2.1 million (Sh176.4million), subject to final approval by regulators and $900,000(Sh75.6million) of additional unsecured loans.

“The proceeds from the debt financing will be used for advancing work on the Mrima Hill niobium and rare earth project in Kenya and for general working capital purposes,” the company said.

Niobium is mixed with steel to create a strong alloy used in the construction of pipes for water and sewage systems and components used in various types of vehicles.

Rare earths are vital in manufacturing high-tech electronics products such as specialised miniature nuclear batteries, laser repeaters, super conductors and miniature magnets

The company said in March it will drill at a new site in Kenya that has shown potential for rare earth deposits.

Pacific Wildcat said tests had established the presence of high grade deposits of rare earth on Kiruku Hill, just three kilometers from its current Mrima Hill project site.

A global scarcity of rare earth has kept prices high. China, which accounts for an estimated 97 per cent of global rare earth supplies, has been tightening trade in strategic metals, sparking a jump in prices. Japan, which accounts for a third of global demand, has been hard-hit by scarcity and has been looking to diversify its supply sources.