Spur Ventures Inc., Vancouver, said Oct. 30 that it has terminated the agreement with Zhong Chuan International Mining Holding Co. Ltd. originally announced in April. Spur said it is considering all of its legal and other options in connection with the failure to complete the agreement. Spur said it has also suspended construction of a MAP plant pending a complete review of the impact of the global financial crisis on the Chinese economy and the fertilizer sector.
Back in April (GM April 21, p. 15), Spur said it was clear that it must align itself with an influential and experienced Chinese company to ensure its success in China. Zhong was to invest some $11.34 million in Spur to acquire 23.4 percent of the company, with options to acquire 37.5 percent. At the time, Spur said its primary focus would be to ensure that Spur’s Sino-Canadian joint venture, Yichang Maple Leaf Chemicals, could start its two mines as soon as possible. Spur had hoped to become the premier integrated fertilizer manufacturer in China, with plans to produce up to one million mt/y of high quality compound phosphate fertilizer for domestic consumption in the province of Hubei, China, located near Yichang City.
After full consideration by the board, Spur says it has decided to use its financial resources to make strategic investments in stressed natural resource opportunities within the context of current financial markets. It said several key stakeholders have been proponents of this strategy in recent months. Spur’s focus will be on Canadian companies with assets in low-risk jurisdictions. Spur believes this change in strategy will make optimal use of its financial resources and maximize value for all shareholders in the current environment. Consistent with this plan, Spur will convert its U.S. dollar-denominated cash investments to Canadian dollars.
Due to the current volatility of financial markets, Spur’s board believes its share price is significantly below its asset value per share. As a result, the board has approved a Shareholder Rights Plan for the company to ensure the fair treatment of all shareholders in the event of any takeover offer for the company’s common shares. Spur said it is not adopting the plan in response to any specific takeover bid.