Demetallica tells shareholders to reject AIC Mines takeover offer as operations ramp up

Wed 12 Oct 22, 11:47am (AEST)
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Key Points

  • Demetallica was hit by a takeover offer from AIC Mines in mid-September after only 5 months trading
  • Company today tells shareholders to reject the takeover offer
  • The company notes offer has commercial merit, is open to further discussions towards an “improved offer”

When Demetallica (ASX:DRM) was hit by a takeover offer from AIC Mines (ASX:A1M) mines last month, the $36m offer was notable for one reason above all else: Demetallica had only been trading at that time for five months. 

The takeover offer saw the company’s share price jump 34% in morning trades alone. 

Today, almost exactly one month later, Demetallica is advising its shareholders to reject the offer by taking no action. 

“Some commercial merit” 

The big thing to note from today’s announcement is that Demetallica remains “open to discussions with AIC in relation to an improved takeover offer that more adequately reflects the value of the company’s assets.” 

In short: Demetallica perceives it's worth more than $36m down the line, once its operations advance further. Given a forecast demand boom for copper through the 2020's and into the 2030's, it isn't hard to see why that perception endures.

The basic principle of AIC’s offer was to combine Demetallica’s Jericho copper resource with the former’s existing Eloise copper mine. 

Demetallica notes while that proposition did possess “some commercial merit,” ultimately, the Board has decided thumbs down on the $36m deal. 

Risk to shareholders 

Demetallica today highlights it is tracking towards a JORC resource upgrade for Jericho for publication later this month.

This will be posted before AIC’s takeover bid closes, providing “shareholders with adequate time to consider the offer with the benefit of the updated MRE.” 

Demetallica has also advised shareholders that because the offer remains conditional, any shareholders who accept the offer “will be prevented from otherwise dealing with their Demetallica shares.” 

This includes the ability to sell Demetallica shares on the market, the company highlights. 

A look at the state of Demetallica's three month charts
A look at the state of Demetallica's three month charts
Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Demetallica 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.


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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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