Sierra Rutile has received notice from Iluka noting geotechnical risks at two dams that form part of the company's operations, and that such risks will result in the non-satisfaction of the material adverse change condition precedent under the Merger Implementation Agreement (MIA).
Iluka has also indicated it will not proceed to closing the Merger on Nov. 29, as expected.
Sierra does not believe that there has been any event or fact that will result in the non-satisfaction of the material adverse change condition precedent under the MIA.
Its production remains in line with management's and market expectations and its operations within appropriate industry standards. The Long Stop Date under the MIA will occur on 30 November 2016.
Sierra intends to take up an offer included in the Iluka Notice to consult in good faith with Iluka whether to extend the Long Stop Date. Pending resolution of such discussions, Sierra is considering all options and has reserved all rights available to it under the MIA.
The suspension of the admission to trading on AIM of, and cessation of dealings in, Sierra shares will not now occur at 7.30 a.m. on 29 November 2016 and cancellation will not now occur at 7.00 a.m. on 30 November 2016, each as previously announced. Sierra will provide a further update as soon as possible.
At 9:46am: (LON:SRX) Sierra Rutile Ltd share price was -6.75p at 29p