Saudi Arabia to visit Brazil and Chile as seeks to diversify mining
The diversification strategy includes plans to expand into international mining to secure access to minerals including copper, cobalt and nickel, as well as lithium.
Australian copper miner MOD Resources said on Monday larger rival Sandfire Resources’ A$0.38 a share offer undervalued the company, but said it was willing to engage with its suitor to come to a “compelling price”.
Earlier in the day, Sandfire confirmed media reports about its A$88 million ($62.97 million) bid for MOD, as per Reuters calculations, which represents a 73 percent premium to MOD’s last close of A$0.22.
Perth-based MOD confirmed the non-binding and conditional bid from Sandfire was made on Jan. 16 after allowing the company access to its data room and a site visit over a possible joint venture deal.
In the same statement, MOD said it would raise about A$15 million via a share placement and rights issue, with the majority of the proceeds to be used for funding its T3 copper project in Botswana.
MOD, which also operates a gold project in New Zealand, said that the T3 project lies in a largely under-explored region with “potential for a long-life high-margin, open pit copper mine with significant exploration upside”.
MOD’s Managing Director Julian Hanna said the bid “confirms the potential of the T3 Copper Project, however the board considers it significantly undervalues the assets of the company.”
The company said it is willing to engage with Sandfire and grant confirmatory due diligence if a compelling price is presented and capable of being supported by the board and MOD shareholders.
The junior miner also said it’s in advanced discussions with a number of parties on funding, which has enhanced its view of the potential that the T3 project offers.
MOD has appointed Sternship Advisers as financial adviser and DLA Piper as legal adviser with respect to Sandfire’s bid.
The bid comes as Sandfire looks for a fresh copper pipeline, with its flagship DeGrussa copper-gold mine in Western Australia set to run down by about 2022. The company also has a project in Montana in North America. (https://bit.ly/2DnIRLx)
($1 = 1.3974 Australian dollars)
(By Nikhil Kurian Nainan, Ambar Warrick and Melanie Burton; Editing by Richard Pullin and Muralikumar Anantharaman)
