Troubled Turkey-focused junior Aldridge Minerals has agreed to be bought by Virtus Mining – a development-stage mining company in which Aldridge director Ahmet Taçyildiz will indirectly hold 70%.
Virtus will acquire all the issued and outstanding common shares of Aldridge for C$0.10 in cash, representing a 25.5% premium to the volume-weighted average trading price of the TSX-V-listed company’s shares over the last 90 trading days.
Virtus has also agreed to loan Aldridge up to $700 000 in order to permit Aldridge to fund its near-term working capital requirements pending closing of the transaction.
The Aldridge board has determined that the transaction was the best way forward, given the current difficult conditions and the limited options available to the company.
The firm is facing significant challenges in raising development capital for the Yenipazar polymetallic gold, silver, copper, lead and zinc project. An optimisation study demonstrated that the project is highly robust with an after-tax net present value of $330-million at a 7% discount rate and an after-tax internal rate of return of about 32%.
However, Aldridge has not only been unable to secure project financing and has also struggled to raise adequate working capital. As a result, the company has seen its cash balance decline and faces a looming liquidity crisis in light of its obligations under its $40-million secured term credit facility with Banka Kombetare Tregtare.
The facility matured on September 16, but Aldridge failed to repay BKT. It has not yet been issued a written notice of default.