Investors are pondering why Russian steel-maker Magnitogorsk Iron and Steel Works is buying Flinders Mines (ASX:FMS) for A$554 million.
Flinder's main asset is the Pilbara iron ore project, a 917.3Mt JORC-compliant resource located in Western Australia.
MMK is Russia's third largest steel company. This past year it had revenue of $7.7 billion and net income of $254 million. mining equipment
In accordance with Reuters, the offer has its own critics. MMK is already over-leveraged, and it is leaping into a project which is a long way away from its current operations with no obvious synergies.
And cracks are beginning to build up from the Chinese economy, which was buoying Australia's iron ore industry. classical quarry line solution
But also for Flinders, the sale can be a chance to lock value in value for assets to see the Pilbara iron ore project by way of fruition.
"The proposal from MMK offers Flinders' shareholders an extremely significant premium and value certainty in a uncertain market," said Flinders Chairman, Robert Kennedy in a statement. stone crusher plant
"Flinders has evolved significantly since late in 2007 in the event it was worth ~A$0.01 per share to today where it's received a A$0.30 per share offer, which values the business at A$554 million. This is a truly fantastic achievement for Flinders and reflects the dedication of Flinders' management team and Board of Directors. A transaction with MMK enables Flinders' shareholders to protect yourself from the functional development risks which would should be overcome to be able to bring the Pilbara Iron Ore Project into production."
Flinder's main asset is the Pilbara iron ore project, a 917.3Mt JORC-compliant resource located in Western Australia.
MMK is Russia's third largest steel company. This past year it had revenue of $7.7 billion and net income of $254 million. mining equipment
In accordance with Reuters, the offer has its own critics. MMK is already over-leveraged, and it is leaping into a project which is a long way away from its current operations with no obvious synergies.
And cracks are beginning to build up from the Chinese economy, which was buoying Australia's iron ore industry. classical quarry line solution
But also for Flinders, the sale can be a chance to lock value in value for assets to see the Pilbara iron ore project by way of fruition.
"The proposal from MMK offers Flinders' shareholders an extremely significant premium and value certainty in a uncertain market," said Flinders Chairman, Robert Kennedy in a statement. stone crusher plant
"Flinders has evolved significantly since late in 2007 in the event it was worth ~A$0.01 per share to today where it's received a A$0.30 per share offer, which values the business at A$554 million. This is a truly fantastic achievement for Flinders and reflects the dedication of Flinders' management team and Board of Directors. A transaction with MMK enables Flinders' shareholders to protect yourself from the functional development risks which would should be overcome to be able to bring the Pilbara Iron Ore Project into production."
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