Andromeda Metals has bolstered its Great White kaolin project in South Australia by executing an unanimously recommended off-market takeover of Minotaur Exploration.
The acquisition will see Minotaur shareholders receive 1.15 Andromeda shares for every one Minotaur share held and provide Andromeda 100 per cent ownership of Great White and Natural Nanotech, which Minotaur currently has a 25 per cent and 50 per cent stake in respectively.
The offer values Minotaur at 20.8 cents per share, which represents a 59.8 per cent premium to last close of Minotaur shares as of November 8, 2021.
According to Andromeda, the transaction will simplify the ownership and management of Great White as the company works towards bringing the project into production.
Andromeda also believes the acquisition gives the company increased scale, market relevance and trading liquidity.
As part of the merger, Minotaur shareholders will obtain a circa 19.5 per cent interest in the consolidated Andromeda, which solidifies their stake in the Great White pie.
Andromeda managing director James Marsh said the Minotaur merger was a critical move in the progression of the Great White project.
“The acquisition of Minotaur and consolidation of the Great White kaolin project represents a significant step towards optimising value for both Andromeda and Minotaur shareholders,” he said.
“We view this acquisition and resultant consolidation of Great White and Natural Nanotech ownership as a logical positive next step in the evolution of the project, unlocking value for all Andromeda and Minotaur shareholders.”
Marsh said the merger will also streamline a project which is still solidifying its financial base.
“Great White is an exciting, low-cost project capable of supplying premium grade refined kaolin minerals into growing market demand for high-value bright-white halloysite-kaolin in ceramic/paint sectors and other applications,” Marsh said.
“Consolidating ownership of Great White provides for increased future funding flexibility and development optionality.”
Minotaur managing director Andrew Woskett echoed Marsh’s sentiments, highlighting the benefit his shareholders are set to realise as a result of the merger.
“By accepting the offer, Minotaur shareholders will realise immediate value for their stake in the Great White project and maintain exposure to the project, via their new Andromeda shares,” Woskett said.
Andromeda’s bidder’s statement and Minotaur’s target’s statement are expected to be dispatched to Minotaur shareholders by the end of November 2021.
The Minotaur board unanimously recommend that shareholders accept the offer, which they will accept in respect of all Minotaur shares they own or control within five days after the offer has opened, in the absence of a superior proposal.
It comes as Andromeda provided an update on the release of its definitive feasibility study (DFS) for the Great White project, set to be released in the first quarter of 2022.
Since securing its premium ceramic product (CRM) offtake agreement in March, followed by its paints and coatings product (PRM) offtake agreement in June, Andromeda has made significant progress on its DFS.
In order to facilitate the production of both the CRM and PRM agreements, Andromeda has had to make significant changes to its mine plan, processing plant and transport logistics, hence the delay of its DFS.
Andromeda is also awaiting approval of its mining lease application, with a response from South Australia’s Department for Energy and Mining (DEM) anticipated later this year.