Rio Tinto (LON:RIO) has inked a deal to sell its majority stake in Rössing Uranium, owners of the Rössing mine in Namibia, the blue-chip group has said. The London-listed miner expects to land up to $106.5 million from the deal.
Rio Tinto’s share price fell in the previous session, giving up 3.34 percent to 3,642.00p, and underperforming the benchmark FTSE 100 index which shed 7.46 points to close 0.11 percent lower at 6,952.86. The group’s shares have lost less than 0.5 percent of their value over the past year, as compared with about a 6.3-percent dip in the Footsie.
Rio Tinto unveils disposal
Rio Tinto announced in a statement this morning that it had entered into a binding agreement with China National Uranium Corporation (CNUC) for the sale of its entire 68.62-percent stake in Rössing Uranum. The sale is for a total consideration of up to $106.5 million, which comprises an initial cash payment of $6.5 million, payable at completion, and a contingent payment of up to $100 million following completion. The contingent payment is linked to uranium spot prices and Rössing’s net income during the next seven calendar years. The blue-chip miner will further receive a cash payment if CNUC sells the Zelda 20 Mineral Deposit during a restricted period following completion.
“The sale of our interest in Rössing once again demonstrates our commitment to strengthening our portfolio and focussing on our core assets, which deliver sector leading returns in the short, medium and long term,” Rio Tinto’s chief executive J-S Jacques said in the statement.
Analysts on FTSE 100 miner
Credit Suisse reiterated its ‘outperform’ rating on Rio Tinto this month, while Liberum Capital trimmed its stance on the stock to ‘sell’. According to MarketBeat, the blue-chip miner currently has a consensus ‘hold’ rating and an average price target of 3,634.00p.