Australia-based mining company Mineral Deposits Ltd. (MDM.TO) and French mining company Eramet said Sunday that they have agreed to create a joint venture in the mineral sands sector. In a separate statement, Mineral Deposits also said that its long-serving Chief Executive Officer Jeff Williams will retire on July 1, 2011. He will be succeeded by Chief Financial Officer Rick Sharp.
Mineral Deposits and Eramet said they have signed a memorandum of understanding or MOU to create a joint venture that will combine Eramet Titanium & Iron, and Grande Cote Mineral Sands project.
Eramet Titanium & Iron or ETI operates the Tyssedal titanium slag and high purity pig iron plant in Norway with an annual capacity of 210 000 tons of titanium dioxide slag, for use in the white titanium pigments industry. A very important co-product of this activity is high-purity pig iron, which is sold to ductile iron foundries, notably for the production of wind mills parts.
The Grande Cote Mineral Sands project is located in Senegal, for which construction will commence in the next quarter. The project is expected to have a mine life of at least 20 years, and is anticipated to produce on average approximately 85 ktpa of zircon and 575 ktpa of ilmenite.
Mineral Deposits or MDL and Eramet intend to finalize the formal documentation by the end of July 2011, and complete the formation of the joint venture by the end of September 2011.
The companies noted that the combination of ETI and Grande Cote would create a new player in the mineral sands industry. It would give the new entity the option to become a vertically integrated titanium feedstock producer, with the Tyssedal plant benefiting from a new source of high quality ilmenite supply, while Grande Cote would be able to secure the sale of most of its ilmenite production.
Under the terms of the deal, Eramet and MDL would both hold 50 percent of the shares of the newly created entity. Eramet will contribute to the joint venture 100 percent of its shares in ETI as well as $30 million in cash, while MDL will contribute its 90 percent participation in the Grande Cote Mineral Sands project. The remaining 10 percent of the project is being held by the Republic of Senegal.
In a separate statement, MDL said that Jeff Williams will retire as managing director and CEO with effect from July 1, 2011. He will be succeeded by Rick Sharp, currently the company's chief financial officer. However, Jeff will remain as an advisor to the company and has been contracted until June 30, 2012.
Rick has been employed by MDL as chief financial officer since mid 2009. Prior to joining MDL, Rick spent more than 15 years in corporate advisory and investment banking, specialising in both mergers and acquisitions as well as equity capital market transactions for emerging companies, and six years in chartered accounting.
Nic Limb, Chairman of MDL said, "Jeff has made an enormous contribution to MDL since first being appointed to the position of Managing Director and Chief Executive over 14 years ago. In particular, his persistence in the early years was instrumental to the Company being in the position it is today. On behalf of the Board we thank him for his considerable input."
MDM.TO last closed trading at C$7.00 on Thursday on a volume of 1,300 shares.
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