The planned acquisition of Kasbah Resources, 75% owners of the Achmmach tin project in Morocco, by Asian Mineral Resources (AMR) has failed.

The Federal Court of yesterday dismissed Kasbah‘s application for approval of the deal, and ordered that it paid the costs of rebel shareholders who had opposed it. Kasbah‘s shareholder list includes the World Bank (IFC), African Lion Group, Thaisarco and Traxys and the acquisition had initially been approved by a 92% majority. However the accounting firm BDO admitted last week that it had made a fundamental error in calculating the fair value of Kasbah‘s shares in its independent expert’s report, which when corrected showed that the AMR offer undervalued them.

AMR is controlled by Russian billionaire Vladimir Iorich and owns a mothballed nickel mine in Vietnam which was shut down earlier this year due to low nickel prices. Minority Kasbah shareholders, led by financial adviser David Willis and corporate adviser Peter Stern, commissioned an alternative report by Deloitte, which pointed out flaws in BDO’s methodology in the calculation of numbers of shares in issue and in valuing the Vietnam mine. Following the Court ruling, Kasbah said that it is “considering its options” and meanwhile trading in its shares on the ASX will remain suspended.

ITRI View: Achmmach was for several years one of the most prominent tin projects, supported by Toyota (20%) and Nittetsu (5%) as minority shareholders. Kasbah had begun exploration work in Morocco in 2007 and in March 2015 announced a JORC reserve of 9.2 Mt @ 0.77% Sn (for approximately 71,300 t of contained tin) and completed an Enhanced Definitive Feasibility study of a planned operation with a 10 year mine life and estimated cash costs of production of some US$13,300/t. It is possible that if the rise in tin prices continues a new buyer could come forward. Other tin juniors have been successful in small-scale capital raisings in recent months, but no major projects worldwide are either fully funded or have begun construction.