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It comes after Iluka delayed the close of the deal last week due to geotechnical risks identified at Sierra’s tailings dams in Sierra Leone.
Iluka said today it had carried out due diligence in July before the deal was announced, but during recent visits for the purpose of integration planning, it had concerns over leakages at the Gangama dam and the amount of freeboard at the Lanti containment ponds.
Senior Iluka operational personnel, including a geotechnical expert, have visited the site to conduct further inspections, and engaged independent consultant Knight Piesold.
Knight Piesold concluded that, subject to the lowering of water levels in the Lanti containment ponds, there was a low risk of immediate failure.
Water levels in the Lanti containment ponds have since been lowered to acceptable levels.
“Iluka has developed plans for dam management, including wall construction techniques, linings, maintenance and operating and monitoring regimes,” the company said.
“Knight Piesold has confirmed that those plans are appropriate in the circumstances.”
As a result, the merger will move to formal completion tonight.
Sierra shares will be suspended from trading on London’s Alternative Investment Market.
The cash deal will also see Iluka assume Sierra’s debt of around $US60 million.
The acquisition is expected to double Iluka’s rutile resource base and secure ownership of Sierra’s mine which produces about 130,000 tonnes of rutile a year.
Shares in Iluka gained 2.2% yesterday to $A6.62, while Sierra shares jumped by 24% to 35 pence.
