Middle Island Resources (Middle Island) has announced an all scrip off‐market take‐over offer for all of the issued ordinary shares of Alto Metals.
The Directors of Middle Island have formed the view that the combination of the assets of the two companies (the Combined Group) creates, among other material benefits to the shareholders of the Combined Group,a company with near-term cash flow potential and considerable production and exploration upside.
Access to Middle Island’s processing plant, currently on care and maintenance,will provide Alto shareholders with an immediate, proximal and cost-effective processing solution for Alto’s gold resources that is not otherwise available to Alto.
The Alto deposits are anticipated to provide initial mill feed and critical mass to support an early recommissioning of the Sandstone gold processing plant,and Middle Island’s Two Mile Hill deposits offer considerable scale and project longevity.
Middle Island has received indicative broker support with respect to the Combined Group for an equity capital raising of approximately $5million in additional funds to advance the feasibility and recommissioning of the Sandstone gold processing plant.
The combination of Middle Island and Alto will consolidate the entire Sandstone greenstone belt and dataset under a single entity.
Middle Island’s Offer
Middle Island is offering 5 Middle Island ordinary shares for every 1 Alto Share.
The Offer values Alto at approximately $9.4million, based on the closing price for Middle Island shares on 28 February 2019 of A$0.009,which represents a premium of:
- 61% to Alto’s last closing price of A$0.028 on 28 February 2019
- 61% to Alto’s 5-Day VWAP of A$0.028, up to and including 28 February 2019
- 34% to Alto’s 10-Day VWAP of A$0.0335, up to and including 28 February 2019
Rick Yeates, Middle Island’s Managing Director,commenting on the Offer,said: “Middle Island’s Offer is compelling for Alto shareholders, who will receive a significant premium based on the last closing price for their shares and will benefit in the future growth potential of the proposed Combined Group
“Middle Island will integrate Alto’s assets with Middle Island’s Sandstone gold project, and immediately embark on an updated feasibility study, incorporating Alto’s Mineral Resources, to determine the economics of recommissioning the Sandstone gold processing plant.
“The collective Middle Island‐Alto gold assets offer a substantial growth opportunity for current and future shareholders of the Combined Group, via low capital intensity and a near-term production profile. The further potential is to significantly extend this production profile via Middle Island’s Two Mile Hill underground deposits, consolidate further proximal deposits within a 100km radius, and amalgamate an entire greenstone belt offering significant resource and exploration upside.
“In the view of the Middle Island directors, the premium offered, the funding support, Middle Island’s technical and management expertise, and participation in the combined Middle Island‐Alto upside, makes the bid a compelling proposal.”
Source: Company Press Release