AIC Mines is eager to grow its copper footprint in Queensland after announcing an off-market takeover bid for Demetallica.
The company will offer Demetallica shareholders one AIC Mines share for every 1.5 Demetallica shares, valuing Demetallica at $0.337 per share, or approximately $36 million.
The proposal represents a 68 per cent premium to Demetallica’s closing share price of $0.2 on September 16.
AIC Mines said the takeover offer would consolidate the company’s Eloise copper mine and processing facility with Demetallica’s Jericho copper deposit, which is located 4km away.
“Combining these assets will provide the quickest and most efficient means of developing, mining and processing the Jericho deposit and potentially other deposits within Demetallica’s Chimera project,” AIC Mines said in a statement.
“The combination creates a company with enhanced scale, financial strength, market relevance and trading liquidity.”
AIC Mines said the takeover could pave the way for a 60 per cent boost in production from Eloise’s current output. It would also increase the mine life to over 10 years.
“When we acquired the Eloise copper mine in November 2021, we signalled that we could add value through exploration success, resource growth, operational reliability and regional consolidation,” AIC managing director Aaron Colleran said.
“We have delivered exploration success and resource growth. We have invested in new equipment and maintenance to improve operational reliability. We are now moving forward with regional consolidation.”
Since commencing production in 1996, Eloise has produced approximately 353,000 tonnes of copper and 174,000 tonnes of gold.
AIC Mines has set a production target of approximately 12,500 tonnes of copper and 6000 ounces of gold for the 2022–23 financial year at an all-in sustaining cost (AISC) of approximately $4.50 per pound of copper.