Noble Minerals Resources has labelled an unsolicited offer from Resolute Mining as inferior, uncertain and unequitable and held firm on its preference for Chinese investment.
The South-Perth based miner is urging shareholders to reject Resolute's $78.7 million financing bid and concentrate on the $87.7 million offer from Chinese investment group Zhongrun.
Resolute's unsolicited offer was made to shareholders on Wednesday and proposed a $78.7 million raising in a non-renounceable entitlements offer of convertible notes - holding a conversion price of 12 cents per Noble share, less than Noble's share price of 14 cents at 9:25, WST.
Resolute also proposed raising a further $6.3 million through a placement of 52.8 million convertible notes and guaranteed to extend Noble's existing project loan facility with Investec by US$20 million.
The offer was made at the same time Resolute announced conditional acquisition of 20 per cent in Noble through a share sale agreement offering one Resolute share to every 12 Noble shares held, provided negotiations with Zhongrun fell through.
Resolute's offer came a month after the Chinese investment group offered funding of $87.7 million in two tranches valuing Noble shares at 16 cents and 18 cents.
The offer would give Zhongrun a 41.5 per cent stake in the company. It has also indicated the potential for a further $55.3 million funding pricing Noble shares at 23 cents each.
Noble managing director Wayne Norris has urged investors to reject the offer on the basis of its inferiority to the Zhongrun proposal.
"It is of inferior value to Zhongrun's proposal, does not provide the immediate funding certainty that the Zhongrun proposal does, and would leave the company highly geared by comparison," Mr Morris said in a statement.
The statement went on to say the Noble board considered Resolute's offer to be an attempt to acquire control of the company without paying a control premium.
"Noble considers the risks associated with not approving Tranche 1 of the Zhongrun transaction to be significant and any delay to the receipt of this immediate equity funding may be detrimental to Noble's ability to meet existing liabilities and fund ongoing activities," Mr Morris said.
Shareholders are required to vote on the initial segment of the Zhongrun offer at a general meeting being held next Wednesday.