Metallica advises shareholders to take no action ahead of target’s statement

Metallica Minerals (ASX:MLM) continues to advise its shareholders to take no action regarding Diatreme Resources’ (ASX:DRX) takeover tilt for the silica sand developer. 

Ahead of delivery of its target’s statement by the end of next week (26 April 2024), Metallica says the statement will include an independent expert report which will express an opinion on the fairness and reasonableness of Diatreme’s offer.

Metallica’s announcement today (19 April 2024) follows its potential suitor on 17 April posting its second supplementary bidder’s statement, which included an updated resource for its Northern Silica Project in Far North Queensland. 

The new resource sits at 120.5 million tonnes, a 17% increase from the previous estimate, and includes a maiden measured resource of 49.5 million tonnes. 

Metallica says the resource must be considered by the independent expert in the context of arriving at an appropriate valuation of Diatreme’s shares. 

Diatreme’s total low-iron, high-purity silica sand resource base now exceeds 402 million tonnes. 

According to Diatreme, the new resource provides foundations for an upcoming Prefeasibility Study and maiden reserve.

If successful, the takeover will create a silica sand company with a pro-forma market capitalisation of about $110 million, with a sizeable resource base. 

On 27 March this year, Diatreme was granted a waiver from the ASX in respect of a requirement to obtain approval from its shareholders to acquire Metallica shares held by Ilwella and Sibelco Asia Pacific, as reported by Mining.com.au.  

According to the latest ASX filings, as of March 2024 Sibelco holds a 16.41% interest in Metallica, while Ilwella holds a 24.19% stake. Sibelco in February this year expressed its support for the takeover offer, which includes a 50.1% minimum acceptance condition. 

With the acquisition of the Ilwella and Sibelco stakes, Diatreme will hold 40.6% of all shares in Metallica and would only require an additional 9.5% of shares to complete its takeover tilt.

Diatreme Resources is an explorer and miner which specialises in advanced mineral sands and silica sand projects. 

Metallica Minerals is focused on developing its Cape Flattery Project, adjacent to the Cape Flattery Silica Sand mining and shipping operation owned by Mitsubishi Corporation in North Queensland.

Write to Adam Drought at Mining.com.au

Images: Metallica Minerals
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.