Malaysia Smelting Corp unit to acquire neighbouring tin mining leaseholder

Malaysia Smelting Corp unit to acquire neighbouring tin mining leaseholder
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KUALA LUMPUR (June 3): Malaysia Smelting Corp Bhd’s (MSC) unit has proposed to acquire a firm that has been granted a mining lease over a parcel of land located adjacent to its mining land in Perak.

MSC said its wholly-owned subsidiary Rahman Hydraulic Tin Sdn Bhd (RHT) is acquiring Asas Baiduri Sdn Bhd  from Tin International Sdn Bhd.

The purchase consideration will be in the form of 272,250 shares or 20% of the enlarged share capital of RHT, said MSC in a filing with the stock exchange.

Upon the completion of the acquisition, Asas Baiduri will become a wholly-owned subsidiary of RHT. Meanwhile, RHT would cease to be wholly owned by MSC and become an 80%-owned subsidiary.

MSC said that due to the location of Asas Baiduri’s land, the acquisition is expected to enable RHT to construct additional tailing ponds or storage and waste rock storage on the land.

The purchase will also expand RHT’s existing mining pit in Hulu Perak district further eastward so that the company will be able to mine additional tin resources within its own land.

In addition, the purchase will also enable RHT to mine the tin resources within Asas Baiduri’s land, said MSC.

The group said certain unmineable tin resources within RHT’s Hulu Perak land — due to space constraints — would become mineable after the acquisition, as it would enable the expansion of RHT’s mining pit into Asas Baiduri’s land.

“Based on the Technical Report [prepared by Reynard Australia Pty Ltd], the median monetary value for the inferred Asas Baiduri resources is estimated to be about RM92 million before costs and RM61 million after allowance for mining costs (but no allowance for profit),’ said MSC.

Shares in MSC finished two sen or 0.55% up at RM3.63, giving the group a market capitalisation of RM1.52 billion.

Read also: Malaysia Smelting Corp set to boost output as tin 'finds balance'

S Kanagaraju