Tiomin to sell Kenya assets to Australia's Base Iron

Tiomin Resources Inc said it agreed to sell its Kwale mineral sands project in Kenya to Australian junior miner Base Iron Ltd for $3 million and a cash royalty, mainly to improve its cash position.

The company said the deal includes the sale of intellectual property related to mineral sands projects in Africa and an option for Base Iron to acquire 100 per cent of Tiomin's unit, Tiomin Kenya Ltd.

The company said it would receive a cash royalty of 1.5 per cent of all product revenue from Kwale, to be paid monthly in arrears.

The project, located south of Kenya's Mombasa port, is expected to produce titanium and zirconium.

Last year, China's Jinchuan Group Ltd terminated an agreement under which the top Chinese nickel producer was to acquire 70 percent stake in the project.

Tiomin, which last month agreed to acquire diamond explorer Vaaldiam Resources Ltd, said the asset sale allows it to focus on Brazil, where Vaaldiam has major operations.

Tiomin shares were down 12.5 per cent at 3.5 Canadian cents in morning trade on the Toronto Stock Exchange.