Canada's Tiomin Resources Inc said it signed an investment agreement with China's Jinchuan Group Ltd, following which the top Chinese nickel producer will acquire 70 percent equity interest in Tiomin Kenya Ltd (TKL).
Tiomin Kenya Ltd is a wholly owned subsidiary of Tiomin Resources, and owns 100 percent of the Kwale mineral sands project in Kenya.
Jinchuan will finance, develop and operate Kwale, and will invest $25 million into TKL for project development, Tiomin said in a statement, adding that it will not contribute any further capital to TKL or Kwale.
Tiomin, which will retain 30 percent interest in TKL, said net cash flow generated by Kwale will be initially used to repay project debt and thereafter distributed between the two companies.
Shares of the Toronto, Ontario-based Tiomin Resources were trading up 1 Canadian cent at 4 Canadian cents Monday morning on the Toronto Stock Exchange.
(Reporting by Koustav Samanta in Bangalore; Editing by Pradeep Kurup)