Tiomin deals half of Kwale

Facing difficulties with meeting lenders’ conditions at its Kwale mineral sands project in southeastern Kenya, Tiomin Resources (TIO-T) has dealt an option to ATW Venture (ATW-V) to earn 50% in the property.

ATW pays US$35 million for the option, a cash infusion that will allow Tiomin to keep work going until it can resolve outstanding issues like a withholding tax agreement and a final mineral lease. Once those issues are resolved with the government, the company can draw down a US$155-million financing package from its lenders.

Tiomin says the revised capital cost estimate for the project is US$229 million, US$16 million higher than the previous estimate.

ATW must show up with US$2.5 million in cash by month-end and US$4.5 million by the end of February, which will give it a 10% interest in the project. It must deliver the remaining US$28 million by April 3 to gain another 40%. A kicker to the deal gives ATW the option to acquire a half interest in Tiomin’s Tanzanian exploration projects for US$3 million, an option it must exercise before the end of January.