PERTH (miningweekly.com) – ASX-listed Verdant Minerals has signed a A$40.5-million takeover deal with CD Capital Natural Resources Fund, under which all of its shares not held by Washington H. Soul Pattinson would be acquired for 3.2c a share.
“The offer from CD Capital, a London-based private equity firm, represents a 113% premium to Verdant’s current share price and so is demonstrably accretive to our shareholders on the basis of the company’s share price and market capitalisation” said MD Chris Tziolis.
The offer price also represented a 110% premium to Verdant’s 30-day volume weighted average share price and a 92% premium to its six-months volume weighted average share price.
Verdant holds a number of industrial mineral projects in the Northern Territory, including the large-scale Ammaroo phosphate project, and a portfolio of sulphate of potash and silica projects.
“The advancement of the Ammaroo phosphate project will require significant capital, which at the market capitalisation and share price prior to the offer, is highly unlikely to be raised from existing shareholders and without very significant dilution,” said Tziolis.
A feasibility study considered a Stage 1 development to produce one-million tonnes a year of phosphate rock concentrate, which would be replicated during year five, taking production to two-million tonnes a year of rock concentrate from year six until the end of the project’s 20-year mine life.
The Stage 1 development is expected to require a capital investment of A$368-million, while the Stage2 development would require a further A$200-million investment
The project already has federal and state environmental approvals.
Tziolis said on Monday that subject to an independent expert’s report, and in the absence of a superior proposal, Verdant’s independent directors have urged shareholders to accept the takeover offer from CD Capital.
Should the transaction be implemented, CD Capital will hold a 65% interest in Verdant, with Washington H. Soul Pattinson retaining its 33% share in the company.
Verdant will likely be de-listed once the transaction is effected.