PERTH (miningweekly.com) – Junior nickel developer Cannon Resources has recommended an all cash takeover offer from Canada-based private equity firm Kinterra Battery Metals Mining Fund subsidiary Kedalion Nickel.
Kinterra is offering 45c a share for the Cannon shares, offering a 43% premium to the company’s last closing price of 31.5c a share, and a 58% premium to its 30-day volume weighted average price.
Cannon has urged shareholders to accept the offer, saying it provided shareholders with certainty of value, a compelling premium to the company’s trading price, and mitigated the risk and uncertainties given the current volatility in global markets.
“Kinterra’s offer creates an excellent opportunity for Cannon shareholders to realise value for their investment while moving the asset to Kinterra who can take Fisher East to the next stages of development. Fisher East is at an inflection point and this transaction removes the risks and equity dilution associated with the next phase of intensive project development work,” said Cannon chairperson Alex Passmore.
Cannon’s flagship project, Fisher East, hosts four high-grade nickel sulphide deposits which have a combined Joint Ore Reserves Committee-compliant mineral resource of 134 100 t of nickel at an average grade of 1.8% nickel.
The offer is subject to a number of conditions, including a 50.1% minimum acceptance condition.
Kinterra already holds a 19.99% interest in Cannon after having struck pre-bid acceptance agreements with a number of the company’s shareholders, including its largest shareholder Ponderosa Investments, which holds a 15.5% interest.
Meanwhile, to assist Cannon with its funding requirements during the offer period, Kinterra has made up to A$1-million in a short term loan facility available, which Cannon can withdraw, at its discretion, subject to certain conditions.