PERTH (miningweekly.com) – The share price of junior Alto Metals surged by more than 80% on Monday as the company weighs its options regarding a possible bid from fellow-listed Goldsea Australia Mining.

Goldsea, which is an Australian wholly-owned subsidiary of Shandong Goldsea Group, at the end of last week announced its intention to make an off market takeover to acquire all of Alto’s shares at a cash price of 6.5c each.

Goldsea noted that the offer represented a 93% premium to Alto’s one-month volume weighted average share price, and a 103% premium to the junior explorer’s closing price on February 20.

“We are convinced that our offer is a unique opportunity for Alto shareholders. The offer provides certainty of value at a genuinely attractive cash price for Alto shares,” said Goldsea Group chairperson Jianjun Li.

“For Goldsea, this is a logical step, in line with the group’s strategy to bring the ownership of the Sandstone gold project within its portfolio. Given the nature of Sandstone exploration and potential restart, we believe that the Sandstone gold project would be best placed being wholly-owned within a larger, diversified portfolio such as Goldsea’s.”

Alto’s Sandstone gold project, which is currently estimated to host some 261 000 oz of gold, is located in the East Murchison mineral field of Western Australia.

Alto on Monday urged shareholders not to take any action, with the board considering a formal response.

Alto pointed out that the Goldsea offer was subject to a number of conditions, including Foreign Investment Review Board approval, and a minimum acceptance of at least 90%.

Alto said that the board considered the continued, unsolicited interest as a strong endorsement of both the company and its Sandstone project, with the ASX-listed Alto having spent a significant portion of 2019 fielding an unsolicited takeover offer from fellow-listed Middle Island Resources.

Middle Island’s takeover offer for Alto, which had consisted of six of its own shares for every one Alto share held, valuing Alto shares at around 5.4c each, lapsed in November last year after the offer failed to reach its minimum 50% acceptance condition.

Alto shares were trading at a high of 6.5c a share on Monday, up from a low of 6c each.