Demetallica soars on $36m takeover offer from AIC Mines Limited

Demetallica (ASX:DRM) shareholders have seen the company’s share price return to 27c, what it was when the company first listed in May, following a takeover bid for the company by AIC Mines (ASX:A1M).

At this current time, Demetallica is advising its shareholders to take no action until the company’s directors publish a report paving a way forward. 

Demetallica also today notes AIC’s offer is unsolicited. Demetallica has elected ICA Partners as a corporate advisor, with Steinepreis Paganin as legal advisor. 

All in all, AIC is offering Demetalica $36m for the entirety of the company. Demetallica has a market cap of $23m. 

Demetallica shareholders would pick up 1 AIC Mines share for every 1.5 Demetallica shares held under the offer. The $36m sum for Demetallica works out to 33.7cps; Demetallica’s share price this morning sits at 27c. 

What Demetallica decides to do, here, remains to be seen. Keep an eye on Market Index news for updates. 

AIC wants Jericho and Eloise to meet 

AIC Mines wants Demetallica because of the latter’s existing Jericho copper project being only 4km away from AIC’s Eloise copper mine, which would allow AIC to increase its own scope of operations and trading volumes. 

Ultimately, AIC (if it gets its way) will absorb Jericho into Eloise, giving it the ability to increase mine life by 10 years. AIC acquired Eloise in late 2021.

Demetallica shareholders appear positive on the move, given the sharp 43% increase in the company’s share price today. 

Worth noting is that Demetallica faces its first takeover offer after only five months trading on the Oz bourse. 

Quickest way to mine Jericho: AIC 

“When we acquired Eloise last November, we signalled we could add value through regional consolidation…we have delivered exploration success and resource growth already,” AIC Mines MD Aaron Colleran said. 

“Combining AIC Mines and Demetallica is a logical consolidation [given] the tenement holdings of the two companies adjoin.” 

“The Eloise processing facility is only 4km from the Jericho prospect, and combining these assets will provide the quickest and most efficiency means of mining the Jericho deposit.” 

Shareholder enthusiasm for today's offer is clear

Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Demetalica was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.