Dong Shutong, China Nickel Resources’ chairman and CEO - sole owner of Easyman Assets Management and owner of a 90 percent stake in East Grow Management - says, “We are excited about the completion of this acquisition. This is an important step for implementing our vertically integrated business model; and most importantly, it will further enhance the cost effectiveness and enlarge the asset base of the group.”

 

In 2007, China Nickel Resources signed an exclusive long-term fixed price offtake agreement to purchase three million tonnes of ores from Yiwan every year. The company is keen to increase its annual trading volume above three million tonnes.

 

Dong adds, “The acquisition is in line with our growth strategy of developing production and trading in parallel.” Under Chapter 14 of the Listing Rules, the purchase constitutes a very substantial acquisition and is thus subject to shareholder approval.

 

The transaction involves China Nickel Resources paying HKD10 million in cash to Easyman Assets Management and East Grow Management; HKD150 million in cash for conversion of a convertible bond into shares in Yiwan; and HKD1.907 billion for convertible notes to be issued. The acquisition and issuance of convertible notes constitute connected transactions.

 

In 2009, Yiwan was granted a 27-year mining business licence by the Indonesian government for an estimated 177 million tonne iron-nickel deposit in South Kalimantan.