Benzinga | Jul 27, 2021 04:16PM EDT

China Natural Resources To Acquire Precise Space-Time Technology Limited For $16.1M

China Natural Resources, Inc. (NASDAQ:CHNR) (the "Company") announced today that it has agreed to acquire Precise Space-Time Technology Limited ("Precise Space-Time Technology") for consideration of approximately 104.1 million Chinese Yuan (US$16.1 million), which is a 20% discount to the value of Precise Space-Time Technology as determined by an independent valuation firm. The consideration will be comprised of 120 million shares of Feishang Anthracite Resources Limited (HK: 1738) held by the Company (based on the average closing price of Feishang Anthracite Resources Limited over the five trading days before July 27, 2021, and discounted for lack of marketability according to an independent valuation report); (ii) three million restricted shares of the Company (based on the average closing price of the Company over the five trading days before July 27, 2021); and (iii) cash.

Precise Space-Time Technology, through its wholly owned subsidiaries, owns a 51% equity interest in Shanghai Onway Environmental Co., Ltd. ("Shanghai Onway"). Shanghai Onway is principally engaged in the provision of equipment for rural wastewater treatment and the provision of engineering, procurement and construction services in relation to wastewater treatment in China.

The Company is currently principally engaged in the exploration for lead, silver and other metals in the Moruogu Tong Mine, located in the Inner Mongolia Autonomous Region of China, but has been exploring attractive opportunities in various sectors, including the healthcare sector in China. The Company operates as a socially responsible mining corporation and is committed to minimizing the impact of its operations on the environment, and to improving the health and wellbeing of the local communities near its mine.

Mr. Wong Wah On Edward, Chairman of the Company, said, "The rural sewage treatment industry is undergoing a period of rapid development. We believe that in addition to providing compelling synergies with our current operations, this is itself a profitable business to enter with promising returns for our shareholders. Through the acquisition of Precise Space-Time Technology, we are entering the attractive environmental protection business, which we believe will further strengthen our long-term growth opportunities. We expect to directly benefit from the Precise Space-Time Technology team's experience, supply chain and customer relationships and valuable market insights. We believe that demand for comprehensive environmental protection solutions is on a sustained growth trajectory given the global need for more effective environmental solutions."

Mr. Wong continued, "We believe Precise Space-Time Technology's business is highly synergistic with our strategic business objectives in the mining and healthcare sectors. We are excited about the possibilities of leveraging Shanghai Onway to effectively reduce environmental impacts and preserve local water quality standards during mining operations. We have also discovered a huge gap in China's rural sewage treatment rate compared to urban sewage. We believe we can help close that gap by constructing sewage treatment facilities in the local villages where our mining operations are located. We are committed to corporate social responsibility and to improving relations with the local communities in which we operate, which will in turn benefit our mining operations in the long term. The preservation of the health and wellbeing of local residents through achievements in environmental protection and water quality preservation is also in line with our intention to enter the healthcare sector in China."