Photo by: Bloomberg
PERTH (miningweekly.com) – ASX-listed MetroCoal has made a bid for fellow-listed Cape Alumina, which owns the stalled Pisolite Hills project, in Queensland.
MetroCoal made an unconditional cash offer to acquire all Cape Alumina’s shares through an on-market bid, offering Cape Alumina shareholders 0.6c for every share held.
Cape Alumina’s shares rose sharply to A$0.048 on Tuesday, up from an opening price of A$0.027 a share. By the end of the day, the company’s stock traded lower at A$0.019 a share.
MetroCoal said that by acquiring Cape Alumina, the company could expose its shareholders to the diversified bulk commodities of bauxite and thermal coal, for a relatively small capital outlay.
The company was seeking control of Cape Alumina to diversify its asset base and risk profile to provide it with stronger near-term and long-term project pipelines.
Cape Alumina’s shares have been lagging since the Queensland government effectively banned the company’s billion-dollar Pisolite Hills project by declaring the Steve Irwin Wildlife Reserve and the Wenlock river, on Cape York Peninsula, the region’s first ever strategic environmental area.
The state’s decision also caused Cape Alumina to abandon a proposed merger with MetroCoal, which had been looking at developing Pisolite Hills.
Cape Alumina subsequently shifted its focus to the development of its Bauxite Hills mine and port project.
MetroCoal said that on gaining control of all Cape Alumina shares, the company would continue to engage with the Queensland government to ensure that the Bauxite Hills project proceeded.
The company would also look to re-submit development plans for the Aurukun bauxite deposit, after the Queensland government took the decision to defer project development, stating that the benefits of the proposed development were currently insufficient.
MetroCoal would further use its surplus cash to fund Cape Alumina’s bauxite projects, in particular the Bauxite Hills project, with a view to commercial production, while supporting the company’s optimising opportunities with third parties in the exploration and development sector.
Cape Alumina chairperson George Lloyd told shareholders that the company was considering the terms of the on-market takeover bid, and would advise shareholders on a course of action as soon as an assessment was completed.
“At this stage, we advise shareholders to take no action.”