November 9, 2009 / 2:35 PM / in 8 years

UPDATE 1-Tiomin posts Q3 loss on Kenya project deal failure

* Q3 loss C$0.07/shr

* Says writes off C$30.3 mln cost related to Kwale project

* Says considering alternatives for Kwale

Nov 9 (Reuters) - Canada’s Tiomin Resources Inc TIO.TO on Monday reported a quarterly loss, as the junior miner booked a loss of C$30.3 million as it failed to sell its majority stake in a Kenya mineral sands project.

For the third quarter, the company said it posted a loss of about C$31.3 million, or 7 Canadian cents a share. It had reported a break even, a year ago.

Last month, China’s Jinchuan Group Ltd [JCGRP.UL] terminated its agreement with Tiomin Resources, under which the top Chinese nickel producer was to acquire 70 percent stake in Kenya’s Kwale project.

Tiomin said it has written off costs of about C$30.3 million, related with the project and reversed party amounts related to Jinchuan and the long-term loan with the Canadian International Development Agency.

The Toronto, Ontario-based company said it was considering alternatives for Kwale project.

The project, located south of Kenya’s Mombasa port, was expected to produce titanium and zirconium. Tiomin had hoped to mine an average of 330,000 tonnes of titanium-bearing ilmenite at Kwale, 77,000 tonnes of rutile and 37,000 tonnes of zircon per year.

Shares of the company, which have lost more 37 percent in last one month, closed at 2.5 Canadian cents Friday on the Toronto Stock Exchange. (Reporting by Ashutosh Joshi in Bangalore, Editing by Saumyadeb Chakrabarty)

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