Billion dollar copper producer Sandfire Resources is in a game of cat and mouse with ASX-listed copper hopeful, MOD Resources.
23rd of February in Manchester, at the McDonald hotel, Manchester, the hotel is situated next less than 300 paces from Piccadilly train station.
Presenting on the night
MOD Resources Limited (ASX/LSE: MOD)
Ticket Link https://www.eventbrite.co.uk/e/share-talk-investor-evening-23-february-2019-manchester-uk-tickets-55126697436
Street Talk can reveal Sandfire has quietly approached MOD’s board with a takeover offer valuing the exploration junior well north of its $55 million market capitalisation.
MOD wants little to do with Sandfire or its non-binding and conditional bid at this stage. Investor sources said it thinks the offer undervalues the company, and it would have a much brighter future should it be able to develop its strategic Botswana prospects on its own.
But MOD does appear willing to use the corporate interest to its own advantage.
Street Talk understands MOD is seeking to raise $15 million to restock its dwindling bank account and ensure it has the financial strength to stand on its own two feet should corporate interest heat up.
Stockbroker Ashanti Capital was approaching fund managers over the weekend, sources said, seeking to stitch up the equity deal. The raising is expected to be done via a placement and rights issue and – if nothing else – ensure MOD has funds to defend itself. [Interestingly, it is the same broker that raised for Adriatic Metals when Sandfire came knocking in a big way late last year.]
It is understood MOD’s raising makes mention of the Sandfire offer – which is a handy carrot for MOD as it tries to lure in new and existing investors. And the raising is at 30¢ a share, which is less than the 37¢ a share put forward by Sandfire and its boss, Karl Simich.
The question is whether Sandfire returns – or can even get its hands on stock as part of the equity raising. Sources said MOD was willing to engage with Sandfire if the predator was willing to sit down and try and land on an agreed price. But it didn’t like the look of 37¢.
What both parties would be able to agree on is that MOD is sitting on a strategic asset. It is exploring on the last copper belt in Botswana – seen as a relatively safe jurisdiction – that is not owned by one of the majors.
The deal would be expected to be accretive for Sandfire and comes as the miner searches for ways to extend its mine life, which currently only has about three years to run.
By Sarah Thompson and Anthony Macdonald
