Stratum Metals has become the sixth Western Australian company to cancel a backdoor listing deal in the past year, with the Nedlands-based business reviewing its future options, including plans for the East Menzies gold project, after walking away from a planned reverse takeover of a US technology venture.
Stratum said its proposed acquisition of WinWin Holdings was conditional upon the completion of due diligence on the company, which it found was less than satisfactory.
“Stratum confirms that it was not satisfied with its due diligence investigations in respect of WinWin, and hereby confirms that it will not be proceeding with the acquisition,” the company said in a statement.
The news comes two weeks after Stratum appointed Damon Sweeney as CFO and company secretary, and moved its headquarters from Brisbane to Perth.
The WinWin deal was announced in January, with Stratum proposing to exit the resources industry, adopt WinWin’s technology-focused business model and re-list on the ASX under a new name and company direction.
In early March, Stratum announced it had executed an exclusive option agreement to acquire WinWin, following completion of several acquisition terms including an initial $400,000 capital raising.
But it warned that working through the many regulatory and operational issues was taking longer than expected, which led to a one-to-two month extension to the acquisition time frame.
Stratum also named the people who would join its board if it had passed the due diligence stage.
During this time, Stratum continued updating the market on progress and activities at its East Menzies gold project.
Stratum said today it would look into alternative initiatives to progress the East Menzies project.
In the past year, 16 WA-based companies have completed backdoor listing plans, while 13 remain in progress.
Lithex Resources' acquisition of Mpire Media, GRP Corporation's reverse takeover of Spring Networks, Minrex Resources' planned Skin Elements deal, Red Gum Resources' acquisition of the Australian Travel Group, and Resource Star's Cloud Lands Digital Fortress buy were all cancelled in the last 12 months.
Stratum shares were unchanged at 0.5 cents each at 1pm.
