Singapore-born Datuk Low Tuck Kwong is the Indonesian founder of coal-mining company Bayan Resources. He and his family have a controlling stake in Singapore-listed Manhattan Resources. MANHATTAN RESOURCES, which is controlled by Indonesian mining billionaire Datuk Low Tuck Kwong, has set its sights on acquiring an indirect stake in Mineriver, which JES International spurned recently.Manhattan Resources said last night that it has entered into a call option agreement to acquire up to 60% of an investment holding company (Starsmind Capital) which has an option to acquire up to 39.4% of Mineriver.
Mineriver, through a wholly-owned Xinjiang subsidiary, holds exploration rights, and will seek mining rights, to a vast area in Xinjiang, China, which hold resources -- mainly magnesium oxide and silicon dioxide -- worth as much as US$500 billion.
This amount was arrived at in a recently-concluded independent JORC Report, which was prepared according to the Australasian Code for Reporting of Exploration Results.
"We are most pleased to have Datuk Low's vehicle, Manhattan Resources, as a strategic investor. It's a big endorsement of our mine. They know mines, and have the track record and resources to help us develop our mine in Xinjiang," Mineriver CEO Ho Sing Ming told NextInsight. He and his wife are the other shareholders of Starsmind.
Manhattan Resources will issue new ordinary shares at 64.5 cents apiece for its stake -- which could be between 15% and 60% -- in Starsmind.
The deal values Mineriver at S$169 million, much lower than the S$423 million valuation under the deal with JES (based on the weighted average of the 3 proposed tranches of investment by JES).
Manhattan Resources may be viewed as a pre-IPO investor, as Mineriver has previously said it would seek a listing of its shares to raise funds to develop its mine.
Datuk Low's son, Low Yi Ngo, is CEO of Manhattan Resources. Manhattan Resources, whose CEO is Low Yi Ngo, the son of Datuk Low, said it believed the investment would broaden its earnings base. It currently engages in ship chartering and provision of freight services, primarily for coal carrying activities; and leasing of mining equipment and machinery. It also provides agency, handling, and consultancy services; and coal mining ancillary services.
Datuk Low, 65, is not only its controlling shareholder but also the founder, president commissioner and controlling shareholder of coal mining company Bayan Resources, which is listed on the Indonesian Stock Exchange.
Forbes this year ranked him No.9 richest person in Indonesia.
For FY2013, Manhattan Resources reported revenue of S$23.8 million and profit of S$1.8 million.
Its stock has chalked up more than 111% gain since the start of this year to close at 74 cents recently, prior to a trading halt being called pending the release of the news of the investment in Mineriver.
Manhattan Resources' stock traded recently at 148 times PE, and a market cap of S$375 million.
Magnesium is found on the surface of a 21.5 sq km site in Tuoli district in Xinjiang which is not populated. The site is nearly 3X the size of Toa Payoh town in Singapore. Photo: MineriverSee detailed agreement on the SGX website.
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