Gindalbie proposes demerger, set to be acquired for $25m

The board of Gindalbie Metals has recommended shareholders accept a takeover offer from its Karara project partner Ansteel, and has proposed to demerge its wholly-owned subsidiary Coda Minerals.

Gindalbie said its largest shareholder, Chinese steelmaker Ansteel, offered 2.6 cents a share for the 64.29 per cent of the company it did not already own.

The offer represents a 90 per cent premium to Gindalbie’s 30-day volume weighted average price, and equates to approximately $25 million.  

The West Perth-based company owns 47.8 per cent of the trouble-plagued Karara magnetite project, which is located 200 kilometres east of Geraldton.

In September 2014, Gindalbie recorded an impairment loss of $592 million at Karara and wrote-down the project’s value to nil.

Today, the company also proposed to demerge its wholly-owned South Australian-focused subsidiary, Coda Minerals, to its shareholders.

Coda will retain the Mt Gunson cobalt and copper assets and $10.64 million in cash.

Gindalbie non-executive chairman Keith Jones said the acquisition and demerger proposals were mutually beneficial.

“The acquisition and demerger allow Gindalbie shareholders to receive a cash price significantly higher than the current market price for their Gindalbie shares,” he said.

“[Shareholders will] emerge with an ownership stake in an exciting new company that is focused on the Mt Gunson copper-cobalt project.

“Coda intends to apply for listing on the ASX, with listing subject to all necessary regulatory approvals, and carry out fundraising in the short to medium term to strengthen its balance sheet.”

Gindalbie is being advised on the transactions by Clayton Utz and Cannings Purple.

Ansteel is being advised by Morgan Stanley Asia and Norton Rose Fulbright.

Shares in Gindalbie were up 116.67 per cent to close trade at 2.6 cents each.