Nord sells interest in Sierra Rutile

Nord Resources (NRD-N) is selling its half-interest in Sierra Rutile, the now-dormant heavy mineral sands operation in Sierra Leone.

The asset will be acquired by MIL Investments, Nord’s largest shareholder, in return for cancellation of its shares. MIL, headed by Jean Raymond Boulle, currently controls 29.7% of Nord, equivalent to 7 million shares. MIL will transfer these shares, valued at US$3.5 million, back to the

company, which will cancel them. However, Nord will retain a 5% carried interest in Sierra Rutile.

In return for acquiring the half-interest, MIL will pay US$1.25 million in cash, and release Nord from US$6 million in obligations owed to bank lenders.

Sierra Rutile has not operated since 1995, when civil war broke out in the West African nation. When in production, the mine was one of the largest employers in the country, and the deposit remains one of the largest, highest-grade natural rutile deposits in the world.

With the cancellation of MIL’s shares in Nord, the number of the latter’s outstanding shares falls to 16.5 million.

Pierce Carson, Nord’s chairman, says the company, which has US$7 million in cash and no debt, now plans to look for acquisition opportunities in the gold and base metal markets. It recently acquired the Johnson Camp copper mine in southern Arizona from Summo Minerals (SMA-V). Summo, which acquired 1.6 million shares in the Johnson Camp transaction, will see its interest rise to just under 10% of Nord, making it one of the largest shareholders.

Nord also owns a 28.5% interest in Nord Pacific (NPF-T), which owns a 40% interest in the Girilambone copper mine in New South Wales, Australia, as well as exploration and development properties in Papua New Guinea, Mexico and Canada.