Stung by SGX suspension, ISR Capital to issue third report over mining asset

ISR Capital, which has had its shares suspended by the regulator, said on Wednesday it will commission a third independent report to value a proposed purchase in Madagascar that would allow the firm to mine for rare earth oxides.

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Guanyu said…
Stung by SGX suspension, ISR Capital to issue third report over mining asset

Jamie Lee
07 December 2016

ISR Capital, which has had its shares suspended by the regulator, said on Wednesday it will commission a third independent report to value a proposed purchase in Madagascar that would allow the firm to mine for rare earth oxides.

"In response to the Singapore Exchange (SGX) query of November 21 2016, I wish to announce that the company intends to commission a third independent report by a qualified valuer to assess the value of the Madagascar asset and to address remaining issues raised by the latest query," said the newly appointed chairman of ISR Capital, Chen Tong, in a regulatory filing.

SGX in November took issue with the two earlier reports used by ISR Capital to support the proposed S$40 million acquisition cost for a 60 per cent stake in Tantalum Holding (Mauritius). Tantalum's unit holds a mining concession for a rare earth oxide resource in Madagascar, an island located off the south-eastern coast of Africa.

The bourse operator said the first valuation report did not meet listing rules requirements as it was prepared by a sole proprietor.

As for the second report, SGX said this did not disclose a discussion on the data collection, quality control for the mineral resources estimates, as well as details on how the mineral resource estimates were derived, among other things. The concession was valued at over US$1 billion.

SGX then took an uncommon step of suspending trading in ISR Capital shares.

In a three-page letter, Mr Chen, who had been appointed in November, said he is aware of "speculative media reports" about ISR Capital.

"Despite these reports, I have full faith that the company practises the highest levels of corporate governance and ethics," said Mr Chen, adding that he has invested S$2 million via a share placement, and intends to invest another S$2 million through a second tranche of share placement.

He also said ISR Capital has signed a memorandum of understanding with China Non-ferrous Metal Industry's Foreign Engineering and Construction Co, with the state-linked entity said to be interested in offering "extensive expertise and background to ISR Capital".

"I am completely committed to ensuring ISR Capital's successful acquisition of the Madagascar project and to enhance shareholder value through the responsible extraction of valuable rare earth oxides," he added.

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