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Demetallica rejects AIC bid

12th October 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Takeover target Demetallica has rejected a A$36-million takeover offer from fellow-listed AIC Mines.

AIC in September launched the takeover offer, offering one of its own shares for every 1.5 Demetallica shares held, valuing the company at 33.7c a share, or at A$36-million.

Upon AIC Mines acquiring all of the Demetallica shares under the offer, AIC Mines will have 384.1-million shares on issue and Demetallica shareholders will own approximately 18.7% of the combined group.

The offer represented a 68% premium to Demetallica’s closing price of 20c a share on September 16, and a 58% premium to its 30-day volume weighted average share price.

Demetallica said on Wednesday that while there was "some commercial merit" in combining the company’s asset, particularly the Jericho resource, with AIC Mines, the offer in its current form did not attribute commensurate value to Demetallica’s exploration portfolio or the material synergies that could be available by incorporating the Jericho resource into AIC’s operations.

The combination of AIC’s Eloise operation and the Jericho project will result in a combined resource of 240 000 t of copper and 188 100 oz of gold, increase mine life by more than ten years, and has the potential to increase annual production to over 20 000 t of copper and 10 000 oz of gold in concentrate, based on the staged expansion of the Eloise processing facility to 1.4-million tonnes a year - a 60% increase on the current production rate.

Economies of scale would also reduce all-in sustaining costs, AIC previously said.

Demetallica on Wednesday noted, however, that the company remained open to discussions with AIC in relation to an improved offer that "more adequately reflects the value of the company’s assets".

In the meantime, the company is working towards an updated mineral resource estimate for Jericho towards the end of October.

Edited by Creamer Media Reporter

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