Diatreme Resources (ASX:DXR) has increased its stake in Metallica Minerals (ASX:MLM) to 56.01%, thereby satisfying a key condition in its off-market bid to acquire the silica sands-focused junior.
An announcement to the ASX this morning confirmed Diatreme had acquired more than 95.35 million shares, lifting its interest from 46.08% to above the 50.1% minimum acceptance threshold.
On 16 February, Diatreme announced its intention to make an all-scrip takeover bid for Metallica.
Since then, both companies have raised concerns regarding an independent expert report (IER) and Metallica Minerals’ target’s statement.
On 2 May, Diatreme notified Metallica of several issues identified with the IER in a review report, including flaws in the valuation of Metallica.
Following Diatreme’s announcement, Metallica issued a response claiming it is more advanced than Diatreme and considers it “highly unlikely” that Diatreme would progress to a final investment decision by mid-2025.
Metallica is yet to address the issues, which Diatreme says “seriously undermines the credibility and usefulness of the IER.”
Diatreme has called on Metallica directors to provide any revised or restated IER and target’s statement no later than 21 May.
The takeover offer was originally due to close on 27 May, but Diatreme has extended the offer period to 3 June 2024.
If the takeover goes ahead, the combined companies will create one silica sand entity with a pro-forma market capitalisation of $110 million, alongside a substantial resource.
Write to Aaliyah Rogan at Mining.com.au
Images: Diatreme Resources
