Brisbane-based silica sand miner Diatreme Resources has made a conditional takeover offer for Metallica Minerals, a move that would combine the companies' silica sand assets in Far North Queensland to create a larger resource base for the global solar photovoltaic industry.

The all-scrip offer of 1.2219 fully paid ordinary shares in Diatreme for every one share in Metallica will give Metallica shareholders the opportunity to participate in the growth of the combined entity.

“Diatreme intends to put this offer directly to Metallica shareholders on the basis that it represents a compelling opportunity for the shareholders of both Metallica and Diatreme,” said Diatreme chairperson Wayne Swan.

Sibelco Asia, which holds a relevant interest of 16.43% of the Metallica shares on issue, has reportedly indicated that it will accept the offer in respect of the shares it holds, subject to Diatreme obtaining Australian Securities and Investments Commission modifications and in the absence of a superior proposal.

“We are grateful for the early support shown for this offer by Sibelco Asia Pacific, a major shareholder of both Metallica and Diatreme,” said Swan.

Diatreme CEO Neil McIntyre explained that the acquisition of Metallica aligned with Diatreme’s strategy of building a world-class asset portfolio of high-purity silica deposits of regional significance and scale.

“This is a regional consolidation of proximate, significant, high-quality silica assets in the Cape Flattery region, providing the opportunity for sensible progressive project planning, permitting and implementation, whilst further broadening available export optionality within Cape Flattery regionally.

"Further, Diatreme has the financial capacity, technical expertise, industry partners and third-party stakeholder relationships required to advance the silica assets of the combined entity in the interest of all combined shareholders with the aim of bringing the projects into timely production.”