Rex Minerals receives $393m takeover offer from MACH Metals

A global partnering search by Rex Minerals (ASX: RXM) has attracted a $393 million takeover offer from mining group and major shareholder MACH Metals Australia.

Under the terms of the offer, MACH will acquire all the shares in Rex that it does not already own for a cash consideration of $0.47 each.

The offer price represents a premium of 79% to Rex’s 30-day volume-weighted average price of $0.26, a 98% premium to the 90-day VWAP of $0.24 and a 176% premium to the $0.17 share price of Rex’s most recent entitlement offer in January.

Competitive process

MACH’s offer follows a competitive global partnering search focused on funding and development for Rex’s $854m Hillside iron oxide-copper-gold project on South Australia’s Yorke Peninsula.

The process was instigated after Rex considered the risks and potential ownership dilution associated with standalone development of the flagship asset.

Rex has appointed Macquarie Capital as its financial adviser for the takeover and Baker McKenzie as its legal adviser, while MACH will use MA Moelis Australia as its financial adviser and Corrs Chambers Westgarth as its legal adviser.

Board favours the deal

Rex’s chief executive officer Richard Laufmann said the company’s board had recommended that shareholders vote in favour of the takeover.

“This transaction provides certainty of value as well as the opportunity for shareholders to realise their investment at a 10-year historical share price high,” he said.

“It also represents a more certain outcome for Hillside’s wider stakeholders, including the local community, the South Australian government and Rex employees, who will benefit from MACH’s financial strength and proven track record in project development.”

Ongoing development

MACH managing director Ferdian Purnamasidi said the company was keen to complete the acquisition and continue Hillside’s development.

“The Hillside project aligns with our strategy to diversify our asset portfolio,” he said.

“Our strong focus on copper is critical to the energy transition process.”

“We remain committed to advancing the work that Rex has achieved on the Yorke Peninsula, including supporting the local workforce and the broader community throughout the ownership transition.”

MACH Metals Australia is a wholly-owned subsidiary of MACH Australia Holdings, an experienced operator of mining assets in Australia that currently holds 121.5 million Rex shares, equating to 15.8% equity.

MACH was established in 2015 and is fully owned by Indonesian conglomerate Salim Group.

Large project

Hillside is one of Australia’s largest undeveloped copper projects and currently contains a mineral resource of 337 million tonnes at 0.56% copper and 0.14 grams per tonne gold for 1.9Mt of copper and 1.5Moz gold.

The Stage 1 plan contains proven and probable ore reserves of 82Mt grading 0.62% copper and 0.17g/t gold for 505,000t of copper and 435,000oz gold.

An increase in commodity prices in late 2020 allowed for the development of a Stage 2 mine plan, with Mr Laufmann saying a decision to transition to Stage 2 could occur by the fifth year of production, subject to board and regulatory approvals.