AIC to make $36m play for Demetallica

AIC Mines has laid plans to make a $36 million scrip bid for recently-listed explorer Demetallica, sending the target’s share price up 42.5 per cent.

Subiaco-based resources developer AIC Mines issued a statement to the ASX this morning advising it intended to make an off market takeover for all shares in Demetallica, a copper-gold and base metals explorer headquartered in Adelaide.

AIC is set to offer Demetallica shareholders one AIC share for every 1.5 share held, valuing the target company at about $36 million based on 33.7 cents per share.

The offer price is at a substantial 68 per cent premium to Demetallica’s September 16 trade price and a 35 per cent premium on its 25 cents per share initial public offer price about four months ago.

Demetallica has told shareholders to take no action in response to the deal and has appointed ICA Partners as its corporate advisor and Steinepreis Paganin as legal.

Explaining the rationale for making an offer, AIC managing director Aaron Colleran said the company was moving forward with its regional consolidation plans.  

AIC, which says its strategy is to build a portfolio of gold and copper projects in Australia, proposed that combining its recently-acquired Eloise copper mine in North Queensland and Demetallica’s Chimera copper deposit was logical based on their locale. 

"The tenement holdings of the two companies adjoin. The Eloise processing facility is only 4 kilometres from Demetallica’s Jericho deposit," Mr Colleran said. 

"Combining these assets will provide the quickest and most efficient means of developing and mining the Jericho deposit – to the shared benefit of both AIC Mines and Demetallica shareholders.”

Argonaut PCF is acting as financial adviser and HopgoodGanim as legal adviser to AIC Mines.

AIC Mines shares were up 1.98 per cent to trade at 52 cents before market close. 

Demetallica shares soared 42.5 per cent to trade at 28 cents.