MOD Resources Scoffs At Sandfire’s Unsolicited Bid

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MOD Resources Limited says it has received firm commitments to raise $10 million through an institutional share Placement with an additional $5 million fully underwritten Rights Issue to be offered to existing shareholders. The majority of funds are intended for working capital to advance the T3 Copper Project towards production and defining additional resources within the surrounding T3 Expansion Project area.

Furthermore, following media speculation, the Company announces receipt of an unsolicited, non-binding, indicative and conditional proposal by ASX listed Sandfire Resources NL . The proposal is to acquire 100% of MOD shares via an all scrip transaction equivalent to $0.38 per MOD share. The Board believes this proposal undervalues MOD’s unique and extensive assets.

MOD’s T3 Copper Project in Botswana lies within a largely under-explored, highly prospective region offering a dominant copper-belt scale opportunity. The T3 Copper Project, discovered in March 2016, presents the potential for a long-life, high-margin, open pit copper mine with significant exploration upside. The Company continues to progress the T3 Feasibility Study to reach a decision to mine in the first half of 2019. The Company has also advanced discussions with a number of parties which has provided the Board with confidence in the availability of a range of funding options to progress the T3 Copper Project into production.

MOD’s Managing Director, Julian Hanna, said “Funding from this capital raise will enable the Company to progress the T3 Copper Project towards a development decision and conduct further drilling for additional resources. The unsolicited, indicative proposal for 100% of the Company received from Sandfire confirms the potential of the T3 Copper Project, however the Board considers it significantly undervalues the assets of the Company. With strong ongoing support of our shareholders through a placement and a fully underwritten rights issue, we believe that the Company will have sufficient working capital to achieve our objectives.”

Successful placement of $10 million with a $5 million Fully Underwritten Rights Issue

The Company is pleased to announce that it has received firm commitments to raise $10 million through the issue of approximately 33.33 million fully paid ordinary shares to institutional and sophisticated investors (“the Placement”). The Placement will be conducted using the Company’s existing Listing Rule 7.1 placement capacity.

The issue price for the Placement is $0.30 per share representing a 36% premium to the Company’s last closing share price on ASX. This indicates strong shareholder confidence in the Company and the opportunity that T3 Copper Project and the regional exploration represents to shareholders. To ensure that all shareholders can participate in the capital raising, the Placement will be followed by a nonrenounceable rights issue to raise approximately $5 million (approximately 21.7 million shares) from eligible shareholders (“Rights Issue”), offering 1 new share per 13 shares held. The Rights Issue is fully underwritten by Ashanti Capital. The Rights Issue will be priced at $0.24 per share, a price that closely reflects the Company’s last closing share price on ASX. Further details relating to the Rights Issue timetable will be released to the market shortly.

The funds raised from the Placement and Rights Issue are intended to be used to complete a 2019 capital works program, which will include: Progress the T3 Copper Project through Feasibility Study, mining licence application and early T3 development work to reach a decision to mine, targeted by the end of the first half of 2019; • Completion of purchase of the farm on which T3 Open Pit is located and construction of initial project related infrastructure; • Infill drilling to upgrade part of the early stages of T3 mine production to a JORC compliant Measured Resource category; • Advance conceptual underground mining studies for the T3 Expansion Project and A4 Dome with resource drilling as appropriate; and • Conduct follow-up drilling of initial, shallow copper and silver intersections at the T4 – T23 Dome.

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