SIERRA LEONE Incorporated in Canada and based in Coeur d'Alene, Idaho, WGI HEAVY MINERALS has signed a memorandum of agreement to acquire TITANIUM FIELD RESOURCES, U.S. TITANIUM, and other assets in Sierra Leone. This give WGI control of SIERRA RUTILE LTD. which owns the world's largest and richest rutile mine.
The purchase price is approximately US$90 million, composed of one-third each common stock, convertible notes, and cash. The transaction is anticipated to close within 90 days, subject to completion of the due diligence process and requisite regulatory and board approvals.
The Sierra rutile mine comprises the world's largest and highest grade natural rutile deposit. Prior to its closure in January 1995, the mine produced about 25% of the world's rutile, as well as chloride-grade ilmenite. The Sierra mine has historically operated as one of the world's lowest cost natural rutile producers. Its natural rutile and ilmenite are recognized worldwide for premium quality.
The mine operated very profitably from 1979 to 1995, when it was temporarily closed due to internal conflict in Sierra Leone. In 1994, with a single dredge in operation, the mine generated revenues of approximately US$60 million and operating cash flow of US$23 million. Since the suspension of mining operations in 1995, the owners have expended in excess of US$110 million on rehabilitation work, care and maintenance, and debt servicing.
Since the early 2002 return to political stability in Sierra Leone, with internationally recognized democratic elections, Sierra Rutile has launched a plan to restart its operations by the end of 2005.
The website www.WGIheavyMinerals.com was being updated on Tuesday, but should soon be available with the latest news.
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