Kasbah Resources and Asian Mineral Resources (AMR) have entered into a Scheme Implementation Agreement which if implemented, will result in AMR acquiring all of the ordinary outstanding shares of Kasbah. The companies believe the transaction will provide a clear path to the construction of Kasbah’s Achmmach Tin Project in Morocco.

The Board of Kasbah has unanimously recommended that all shareholders vote in favour of the transaction in the absence of a superior proposal.

Major shareholders of Kasbah, being Lion Selection Group (African Lion Fund) with 15.7%, Traxys Projects LP with 5.3% and Thailand Smelting and Refining Co with 5.7%, have agreed to vote in favour of the transaction. Closing of the transaction is expected to occur during November 2016.

Kasbah has proven exploration and resource development expertise and has recently announced a definitive feasibility study which supports a two-stage development plan for its 75%-owned Achmmach project. AMR brings an experienced management team with a track record of successful underground mine development and operations arising from its operation of the Ban Phuc Nickel Mine in Vietnam.

As a cornerstone shareholder of the combined entity, Pala Investments has provided a commitment to provide its pro rata share of any equity raising in relation to Achmmach, as well as an interim A$1 million bridge loan to Kasbah. Pala, currently the largest shareholder of AMR, will remain as a 37.7% shareholder in the combined company.

The transaction provides upside opportunities for AMR and Kasbah shareholders with exposure to upswings in tin and nickel, a diversified asset base and potential for future growth.

Jim Askew, who is chairman of AMR’s board of directors, will remain as chairman of the board of directors of the combined company. The Board will be composed of up to seven directors, two of which will be nominated by Kasbah and two of which will be independent directors. Evan Spencer of AMR will remain as CEO of the combined company.

The Achmmach project is one of the largest tin development projects located outside of the Asian region and is 75% owned by Kasbah, 20% owned by Toyota Tsusho Corporation and 5% owned by Nittetsu Mining Co Ltd.

Jim Askew said, “AMR has done an excellent job in bringing to production the Ban Phuc Nickel Mine and operating under a challenging nickel price environment.

“We are very excited about the opportunity to team up with proven explorers and resource developers like Kasbah, as well as strategic players such as Toyota Tsusho and Nittetsu Mining and transfer our operating experience and knowhow to successful development of the Achmmach Tin Project.

“Following completion and the positive results of the DFS, as a matter of first priority the combined company will proceed with considering project financing options for the Achmmach project.”