PERTH (miningweekly.com) – ASX-listed Alkane Resources will invest A$8-million into fellow-listed Explaurum, taking a 12.2% stake in that company.
Alkane will subscribe for some 66.66-million shares, at a price of 12c each.
In addition to the share placement, Explaurum will also grant Alkane 53.4-million options, exercisable by November 2019, in two tranches, with the first tranche of 18.6-million options exercisable at 13c each, and the second tranche of 34.7-million options exercisable at 14c each.
If all options were to be exercised, Alkane’s share in Explaurum will increase to 19.96%.
Explaurum is currently the subject of a takeover bid by gold miner Ramelius Resources, which is offering one of its own shares for every four Explaurum shares held, valuing the takeover target’s shares at 12.3c each.
The Explaurum directors have unanimously recommended that shareholders reject the offer.
Alkane said on Monday that its own investment into the junior company, which was subject to a shareholder vote at Explaurum’s next meeting, could be terminated if Ramelius’ offer reached a 30% acceptance, or if a competing proposal reached that threshold.
Explaurum chairperson Chris Baker, meanwhile, welcomed the investment, saying that if approved by shareholders, the strategic investment would deliver Explaurum the opportunity it has sought for the better part of the last year.
“That is the chance to go after the potential exploration upside that the Tampia district offers. Alkane’s belief in this potential, and their willingness to express it through this significant investment in Explaurum, is a strong validation for our shareholder base as to the potential significance of the opportunity that lies in front of us with the Tampia asset.”
“The funds will allow aggressive acceleration of our Tampia drilling programme. First stop will be extensional testing of the shallow and potentially valuable Mace supergene system.”
Baker said that the Alkane investment would present an opportunity to progress the Tampia project to a final investment decision in the first quarter of next year, as well as seeking to drive value aggressively through the drill-bit in the coming months.
“It is also struck at a premium to the implied Ramelius takeover offer price and is without any opportunistic change of control implications,” Baker said.
The Explaurum directors have unanimously recommended that shareholders vote in favour of the Alkane investment, in the absence of a superior proposal.