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Rio Tinto To Sell Entire Stake In Rössing Uranium For Up To $106.5 Mln

Anglo- Australian mining giant Rio Tinto (RTNTF,RIO,RIO.L, RTPPF) announced late Sunday that it has entered into a binding agreement to sell its entire 68.62 percent stake in Rössing Uranium Limited to China National Uranium Corporation Limited or CNUC for up to $106.5 million.

Rössing Uranium is the owners of the Rössing mine in Namibia, which is the world's longest-running open pit uranium mine. Operating since 1976, the Rössing business has produced the most uranium of any single mine.

The total consideration comprises an initial cash payment of $6.5 million, payable at completion, and a contingent payment of up to $100 million following completion.

The contingent payment is linked to uranium spot prices and Rössing's net income during the next seven calendar years. In addition, Rio Tinto will receive a cash payment if CNUC sells the Zelda 20 Mineral Deposit during a restricted period following completion. The total consideration is subject to a maximum cap of $106.5 million.

The company said the deal culminates an extensive assessment of strategic options considered in relation to Rössing.

The transaction is subject to certain conditions precedent, including merger approval from the Namibian Competition Commission. Subject to these conditions being met, the transaction is expected to complete in the first half of 2019.

In Australia, Rio Tinto shares were losing 3.50 percent to trade at A$74.09.

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