The New Century zinc mine, in Queensland.
PERTH (miningweekly.com) – Global metals miner Sibanye-Stillwater has launched a A$1.10-a-share takeover offer for Australian zinc miner New Century Resources, in which it already holds a 19.9% interest.
Sibanye-Stillwater on Tuesday expressed concern about the change in the strategic direction of New Century under its current management, with the building of a tailings asset management services business no longer a focus.
The JSE- and NYSE-listed suitor said that the drop in New Century’s share price, from A$1.05 at the end of January to around 77c a share before the offer was launched, was indicative that shareholders and investors did not back the current strategy.
“We have expressed our concerns directly to the board and did not support the proposed re-election of Nick Cernotta or Robert McDonald to the board at the annual general meeting held on 9 November 2022. We will continue to advocate for change in the current strategic direction of New Century,” Sibanye-Stillwater said in a statement.
Furthermore, the company also noted that New Century might be forced to raise additional equity, given that its balance sheet was under strain on the back of amortisation requirements of an environmental bond facility and the potential funding requirements for growth projects, including the Silver King and Mt Lyell projects. Furthermore, a number of New Century shareholders were also looking to dispose of their holding in the company on-market, despite limited trading liquidity on the ASX, Sibanye-Stillwater said.
The suitor said in a statement that in order to put an end to the downward trajectory of shareholder value, and to facilitate New Century shareholders being able to dispose of their holding in the company, Sibanye-Stillwater was launching the takeover offer at a best and final price of A$1.10 a share.
The cash offer represented a 42.9% premium to New Century’s last closing price on February 20, and a 21.5% premium to its one-month volume weighted average share price.
The offer is not subject to any minimum acceptance condition and is subject only to no prescribed occurrences before the end of the offer period.
In addition to the takeover offer, Sibanye-Stillwater would also acquire an additional 14.3-million shares, or a 10.92% interest, in New Century through an on-market order below the A$1.10 price being offered in the takeover proposal.
New Century on Tuesday urged shareholders not to take any action in relation to the off-market takeover offer, saying the board will consider the offer before making a recommendation.
New Century’s primary asset is its namesake zinc project in Queensland, where it is actively progressing life extension opportunities at Century and studying the potential to restart copper production at the historically significant Mt Lyell copper mine in Tasmania. New Century is also pursuing opportunities with industry peers to reprocess and rehabilitate contemporary and historical mineralised waste assets at operational and legacy mine sites.