Canadian Miner Cancels Morocco Equipment Deal, but Plans to Renegotiate
Canadian company Steadright Critical Minerals has cancelled an agreement to acquire a 50% stake in a Moroccan company equipped to crush and grind ore. The deal was worth several million dollars in shares and cash. The group is not abandoning the project, however, and plans to renegotiate.
Three months after announcing the deal, Steadright Critical Minerals is backtracking. The Canadian group announced on Tuesday, October 6, that it had cancelled the agreement with Maghreb Atlas Trading Sarl and Mining Research Company to acquire a 50% stake in a company that owns a quarry site in Morocco as well as crushing and grinding equipment, according to TheNewswire.
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The agreement was signed on June 27. It stipulated that Steadright would acquire half of the company’s equity, with the two Moroccan partners each retaining 25%. To finance the acquisition, the Canadian company was to give each of the two sellers five million of its shares, for a total of ten million shares valued at 0.20 Canadian dollars per share.
An additional payment of 700,000 euros was to be placed in an attorney’s trust account. Steadright had also committed to being able to spend up to a further 480,000 Canadian dollars on repairs and refurbishment of the site and equipment.
A cancelled deal, but not abandoned
The October 6 announcement changes the picture. Steadright now says it is “cancelling” the purchase agreement, without giving a specific reason for the decision in its statement. The group immediately added that it intends to begin new negotiations on the transaction.
This point is important. The June agreement already provided for a full assessment of the land, crushers and grinding facilities before the 700,000 euros was paid. Steadright had reserved the right to renegotiate or terminate the deal if the assessment revealed significant discrepancies. The company has not said, however, whether this clause prompted the cancellation announced this week.
The group wanted to use the facilities to more easily process ore from its various Moroccan projects. Steadright is already active in the country through several ventures, including TitanBeach, its large-scale titanium project in southern Morocco. An initial area of 16 km² received a mining licence in August.
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A few days later, the group announced plans to prepare a pilot plant for TitanBeach. The cancellation of the acquisition of the crushing equipment does not affect these permits or the announced development of the project, which is now based on a separate structure.
This is not the first Moroccan transaction Steadright has called off this year. In June, the Canadian company had already abandoned its plan to acquire 80% of Exterra Mining & Exploration SARL. At the time, it cited financial documents it considered incomplete and insufficient. On the crushing equipment deal, by contrast, Steadright is leaving the door open: discussions are to resume on new terms.
