PERTH, Australia--(BUSINESS WIRE)--BrazIron, Ltd (ASX:BZL) (“BrazIron” or “Company”) is pleased to announce it has completed the partial acquisition of Global Dynamic Limited’s (“Global”) Silicon Metal Smelting Operations and mines in China under the proposed terms previously disclosed in its news release dated November 18, 2014. The end result gives BrazIron 20% ownership of Global in exchange for issuing securities to Global equating to 55% of the enlarged group.
The Board of Directors is very excited at the potential of the investment in Global, which is forecast to produce 120,000 tonnes of product in 2015. Global owns and operates two substantial silica smelting complexes in China through its subsidiary companies, Hubei Sanxin Silicon Co, Ltd and Gansu Sanxin Silicon Co, Ltd. Together, the smelting complexes occupy 323 Hectares of land. Global also operates and holds mining licenses over four hard rock silica mines.
Global has spent over US$300M in recent years constructing its plants and has recently commissioned its 12th operating 33MVa furnace with a further 8 under construction, which will result in Global being the largest producer of silicon metal by capacity in the world. Global employs over 700 people and sells to international customers including Dow Corning, Shin-Etsu Chemical Co. and WackerChemie AG, as well as supplying the Chinese domestic markets.
Under the agreement, further securities can be issued to Global, equating to another 20% interest in BrazIron, subject to performance milestones including significant dividends being paid to BrazIron totaling between $8 million and $42 million.
Investing in Global creates an opportunity for BrazIron to diversify its portfolio into an existing producing business with a value chain ranging from silica mining to smelting and sales. The unaudited consolidated pro forma balance sheet of the Global Group as of 30 June 2014 included total assets of RMB 4.65 billion and total liabilities of RMB 2.11 billion. Working capital was listed at RMB 342.5 million.
In a subsequent development, BrazIron has appointed Dr. Youzhi Wei as Executive Chairman. Dr. Wei has served as a non-executive director since BrazIron’s listing and was instrumental in securing the transaction with Global. Dr. Wei has over 25 years of industry experience and will lead the Company’s strategic vision moving forward.