MELBOURNE, Australia - Turquoise Hill Resources Ltd. is preparing to sell all its majority stake in Inova Resources Ltd. (TSX:IVA), an Australian mining company listed in Toronto and Sydney that has been on the block for some time.
Shanxi Donghui Coal Coking & Chemicals Group Co., Ltd. is offering 22 cents Aus cash per Inova share and Vancouver-based Turquoise Hill (TSX:TRQ) has conditionally agreed to sell majority stake if no better offer arises.
Based on about 718.8 million shares outstanding, Shanxi Donghui offer values Inova at nearly A$160 million — about 29 per cent above the previous public price.
"Shanxi Dongui looks forward to progressing the development of Inova's mines and growth projects and managing the inherent rises involved. We believe our offer provides Inova shareholders with a full and fair risk-free cash premium for their investment," said Zhang Yaping, chairman of Shanxi Dongui.
The companies say Turquoise Hill has agreed to sell shares representing 14.9 per cent of Inova's equity to Shanxi Donghui and has agreed to sell the rest of its holdings if no better offer comes forward.
Turquoise Hill, now a publicly traded subsidiary of Rio Tinto PLC (NYSE:RIO), is focused primarily on developing the Oyu Tolgoi copper mining complex in Mongolia, has been divesting assets it held as Ivanhoe Mines Ltd.
Inova, formerly called Ivanhoe Australia, is a mining and exploration company operating in the Cloncurry region in northwestern the Australian state of Queensland.
On the Australian Securities Exchange, Inova's shares last traded at 17 cents Aus. Inova closed in Toronto on Tuesday at 16 cents Cdn.
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