The company explained that the earlier $40 million price was agreed upon based on an Oct 20, 2014 and updated June 10, 2016 report issued by SGS Canada Inc.
“The Company has since engaged a third independent valuer who is in the midst of finalising the draft valuation report, which ascribes a much lower fair value to the Project in Madagascar.”
“The Company will make an announcement once the valuation report has been finalised and issued by the independent valuer,” the company said on Aug 6, without naming who the third valuer is.
The lower value of the concession was clearly hinted on Aug 1 when the company announced revised terms of the acquisition. From what was $40 million to be paid in new shares at 10 cents each back in June 2016, ISR will be paying just $4.5 million issuing new shares worth 0.67 cent.
The seller is a Singapore-based entity called REO Magnetic, whose director includes Jonathan Lim Keng Hock. REO Magnetic, in turn, bought the stake from a Germany-listed entity called Tantalus Rare Earths AG in late 2015 for 3.7 million euros ($5.9 million).
John Soh Chee Wen, now in remand for his role in the 2013 penny stock saga, is alleged by prosecutors to have manipulated shares of ISR as well. Following a 4,000% surge within months, shares of ISR crashed by more than half to 12.7 cents on the very day Soh was arrested. Year-to-date, ISR shares have dropped by nearly 95% to close at 0.7 cent on Aug 4.
Update: Shares in ISR Capital closed at 0.7 cent on Monday.
