Globe investment gets thumbs up

SHAREHOLDERS have approved a $A47.85 million investment in Globe Metals & Mining by East China Mineral Exploration and Development Bureau. Proxy votes representing more than 90% of Globe shares were in favour of the transaction, enabling ECE to become a 51% shareholder in Globe.

In November it was initially proposed ECE purchase 118 million shares at 34.5c for $41 million. In March, Globe negotiated a price increase to 40.5c per share. “The reason ECE agreed to pay more is because, with such a good management team, we felt it was safe to invest in Globe,” ECE director general Yi Shao told investors at an extraordinary general meeting in Perth today.

Shao will join the Globe board, along with ECE deputy directors Jianrong Xu and Jingbin Tian. As part of the partnership, ECE will assist in securing the estimated $150 million required in capital costs to develop the Kanyika niobium project in Malawi.

Globe is set to become the world’s fourth major producer of ferro-niobium when production starts late in 2013, at the rate of 3000 tonnes per annum of niobium metal, principally in the form of ferro-niobium. The funds raised in the placement will be used to advance the Kanyika bankable feasibility study. In 2009, ECE became a major shareholder in Arafura Resources, owner of the Nolans Bore rare earth project in Australia’s Northern Territory.

Shares in Globe fell 1c to 31.5c in afternoon trade.