Rio Tinto makes a play for CZR

Rio Tinto has joined Gold Valley Iron Ore and Fenix Resources in the battle for CZR Resources.

While Fenix has offered to acquire 100 per cent of CZR through an all-scrip takeover offer, Rio Tinto and its Robe River Iron Associates joint venture (JV), which also features Mitsui & Co and Nippon Steel, is specifically interested in several tenements that make up CZR’s Robe Mesa iron ore project.

The Robe River JV has offered $75 million for these tenements. The deal would see CZR retain its interest other projects such as the Croydon gold project and Buddadoo project.

This is distinct from Fenix and Gold Valley’s proposals, which are looking to acquire the entirety of CZR.

While the Robe River bid is distinct, CZR has determined it to be a competing proposal and potentially a superior proposal to Fenix and Gold Valley’s offers.

Like Fenix and Gold Valley, the Robe River JV will need to satisfy conditions, including CZR due diligence, and regulatory and shareholder approval.

The Robe River bid is also subject to the negotiation and execution of an asset sale and purchase agreement with Zanf for the acquisition of its interest in the Robe Mesa project.

CZR said Gold Valley’s proposal, which involves the company acquiring all CZR shares for $0.31 per CZR share, is an expression of interest only and does not “constitute a superior proposal” to Fenix’s.

“The non-binding nature of the Gold Valley proposal means there is no certainty that Gold Valley will proceed with a takeover bid on the terms proposed. Gold Valley has also reserved the right to change the structure of the transaction and impose conditions to the transaction,” CZR said.

CZR said it will engage with the Robe River JV regarding its proposal. In the meantime, the company continues to unanimously recommend that all CZR shareholders accept Fenix’s offer, which would see CZR shareholders receive 0.98 Fenix shares for every CZR share at an implied value of $0.30.