AIC Mines and Demetallica are coming together to create a new Queensland copper-gold mining company.
The news comes as the two entered into a bid implementation deed to implement AIC’s off-market takeover offer of Demetallica.
AIC first announced an off-market takeover offer for Demetallica in September, tabling a deal worth one AIC share for every 1.5 Demetallica shares.
Demetallica urged its shareholders to reject the initial offer and AIC has since agreed to improve its takeover bid to one AIC share for every 1.3 Demetallica shares. The Demetallica board has unanimously recommended the improved offer.
Combining the two companies is seen as a logical consolidation of AIC’s Eloise mine and processing facility with Demetallica’s Jericho copper deposit, which are located 4km apart.
“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 when the takeover bid was first announced.
“The combination creates a company with enhanced scale, financial strength, market relevance and trading liquidity.”
Demetallica managing director Andrew Woskett said the consolidation clearly made sense.
“Given the uniqueness of the situation, in terms of the assets so plainly being worth more together than they are individually, we have strong support for the transaction from a large number of our shareholders, and expect similar support from the market more broadly as it understands the robust long-term copper-gold producer this creates,” he said.
AIC said the takeover could pave the way for a 60 per cent boost in production from Eloise’s current output to more than 20,000 tonnes of copper and 10,000 ounces of gold per annum. It could also increase the mine life to over 10 years.
Demetallica shareholders have until November 28 to accept the offer.