Metallica Minerals’ ‘sell’ advice to shareholders

Metallica Minerals (ASX:MLM) has changed its advice to shareholders being wooed in a hostile takeover by Diatreme Resources (ASX:DRX) from ‘hold’ to ‘go’. The offer is 1.3319 ordinary shares for each ordinary share in Metallica. The machinations are now proceeding to a close with Diatreme the winner in the battle of the silica sands juniors. Both companies have exploration leases on eastern Cape York Peninsula. Main image: Diatreme Resources aircore drilling on Cape York Peninsula Metallica Minerals has a 100 percent holding of a 36 square kilometre exploration lease through subsidiary Cape Flattery Silica. Diatreme has 591 square kilometres of exploration leases in the same area. This tenement holding includes the Northern Silica Project (NSP), Galalar Silica Sand Project (GSSP) and the Western Resource Area (WRA). The big fish in Cape York silica sands industry is the Mitsubishi Corporation-owned Cape Flattery Silica Mines. It’s the largest in the world. Related: Diatreme extends takeover offer period for Metallica shareholders Diatreme now holds 82.05 percent of the voting power in Metallica and had until Tuesday week (23 July) to secure more, Metallica told the ASX in a statement. The sell advice came from an independent board committee (IBC) which excluded newly appointed members from the Diatreme Resources board of directors. The advice to the ASX read: ‘Because the DRX bid is unconditional, DRX may extend its offer at any time before it closes. The IBC recommended that MLM shareholders accept the offer based on a number of factors including ‘that MLM shareholders would likely be better off accepting the Offer.’ Noting that Diatreme needed 90 percent of the shareholder voting power to proceed to a compulsory acquisition, Metallica advised that there was no longer any likelihood of an alternative or competing proposal on more favourable terms. The advice also noted that Diatreme was coming close to controlling enough shares to delist Metallica from the ASX. “In light of the above, (Non-Executive MLM board member) Mr Brad Sampson has elected to accept the DRX Offer in respect to the 534,063 MLM shares he owns,” the company advised the ASX. The sale was approved by the Chairman Stephen Everett. Metallica’s Cape Flattery Silica Sand (CFS) Project is located in the Cape Flattery area, on the eastern coastline of Cape York Peninsula, 220 km north of Cairns, and 55km from Cooktown. That's adjacent to the Cape Flattery Silica Sand mining and shipping operation owned by the Mitsubishi Corporation. The Project area is bounded by the Cape Flattery coastline in the Cape Flattery Port area, which is owned and operated by Ports North, a Queensland Government-owned corporation. Ports North owns the Mitsubishi leased jetty, just south of the Project tenement, with the jetty’s ship-loading equipment primarily owned by Mitsubishi Corporation (Mitsubishi). Diatreme's tenement holding includes the Northern Silica Project (NSP), Galalar Silica Sand Project (GSSP) and the Western Resource Area (WRA) with silica resource base interest of 402Mt.

Metallica Minerals’ ‘sell’ advice to shareholders

Industry Queensland

Related News

Moranbah North tops national rescue titles

Strong showing for Whitehaven’s Qld operations

Cloncurry on alert as bushfire threatens

Get access to breaking mining news, now.