Diatreme Resources is set to create Australia’s largest silica sands miner as its takeover bid for Metallica Minerals nears the finishing line.
The emerging silica sands developer announced last week is had secured a 71.2 per cent stake in Metallica, giving it effective control of the Brisbane-based company.
Effective from today, two Diatreme directors have been appointed as Metallica directors, as well as a new independent director, while two current Metallica directors have resigned.
Diatreme’s off-market takeover offer remains open for Metallica shareholders until July 9.
Until tomorrow, remaining shareholders will be able to accept Diatreme shares or risk being ‘stuck’ in an illiquid minority position within Metallica.
“We strongly urge the remaining Metallica shareholders to immediately accept Diatreme’s offer and gain the benefits of the combined group,” Diatreme chief executive officer Neil McIntyre said.
“This offer is only open for a limited time and may not be further extended.”
The all-scrip bid would see Diatreme expand its far-north Queensland silica sand resource base, centred on the Northern Silica project (NSP) located near Cape Flattery.
Metallica’s neighbouring project currently boasts a mineral resource of nearly 50 million tonnes, compared to Diatreme’s more than 400 million tonne estimated resource base in what has been called the ‘Bowen Basin’ of silica sand.
McIntyre said a successful takeover would create “a leading ASX-listed silica company with a pro-forma market capitalisation of approximately $110 million and a significant combined mineral resource base”.
“Diatreme has the financial capacity, technical expertise, industry partners and third-party stakeholder relationships required to advance the silica assets of the combined entity in the interest of all combined shareholders, with the aim of bringing the projects into timely production,” he said.
“This will create Australia’s pre-eminent silica sand miner, strategically located in proximity to fast-growing Asian markets and also with the potential to supply a domestic solar PV manufacturing industry.
“Importantly, it will generate new employment, training and business opportunities for the community of Hope Vale and Cooktown, with a focus on ensuring the benefits flow to all local stakeholders, including Traditional Owners.”
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