Mungana urges shareholders to reject Auctus offer
PERTH (miningweekly.com) – ASX-listed Mungana Goldmines on Monday rejected an unsolicited takeover offer from Auctus Chillagoe.
Auctus launched its 13.5c-a-share offer for all the issued shares in Mungana in April, arguing that the offer gave shareholders in Mungana certainty of value and liquidity.
The offer was a 29% premium to the closing price of Mungana shares on April 28, and a 26% premium to the 30-day volume weighted average price of Mungana shares for the period ending April 28.
Mungana on Monday said that the offer was opportunistic, and materially undervalued the company, its North Queensland mineral assets, and their outstanding potential to generate strong growth for Mungana shareholders.
The metals developer reminded shareholders of the high grade and quality of the flagship King Vol zinc deposit, at the Chillagoe project in North Queensland, where a capital investment of less than A$40-million was required. First production at the project was targeted for late 2016.
Mungana also reminded shareholders of the recent strong rise in zinc prices, and the view among commodity analysis that the price would continue to increase over the coming two years amid a supply shortage.
The ASX-listed company has urged shareholders to reject the Auctus offer.
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