Gold explorer Alt Resources (ASX: ARS) has become the subject of an off-market takeover offer by private Australian company Aurenne Group Holdings Pty Limited.
The all-cash offer would be at a consideration price of $0.0505 per Alt share including shares issued upon the exercise of existing unlisted options.
It would also include 29,127,000 Alt shares to be issued upon receipt of shareholder or board approval as part of agreed performance incentives for directors, key executives and staff.
Alt chairman William Ellis said the board of directors was supportive of Aurenne’s offer and advised that shareholders take no action while it considers the details, including all conditions.
“The board considers the Aurenne offer to be compelling and a strong endorsement of our Mt Ida and Bottle Creek gold assets,” he said.
“We remain fully committed to acting in the best interests of our shareholders.”
The Bottle Creek and Mt Ida projects are located 85 kilometres to the north-west of Menzies in WA’s northern goldfields region.
Alt commenced exploration in March 2018, with a 20,000m reverse circulation drilling campaign which saw it deliver a JORC-compliant resource at Bottle Creek of 5.6 million tonnes at 1.72 grams per tonne for 309,000 ounces gold and 3.78 million ounces silver.
The combined resource across Mt Ida and Bottle Creek stands at 11.55Mt at 1.54g/t gold for 571,000oz gold and 6.66Mt at 20.5g/t silver for 4.38Moz silver.
Alt said it had been considering funding options to meet $5 million in final vendor payments for securing the mining leases at Bottle Creek.
A partial payment of $500,000 is due in July, with the final instalment of $4.5 million due in November.
The company has spent more than $6 million on exploration and resource drilling at the project since execution of the Bottle Creek option when drilling commenced in 2018.
Aurenne has agreed to to provide Alt with funding security to meet its July commitments by raising $3.68 million via the issue of unlisted, unsecured convertible notes.
The issue has a conversion price of $0.03 per share, representing a 37% premium to the 30-day volume weighted average price of $0.0219.
The funds will also allow the company to continue progress towards the delivery of a maiden ore reserve and a pre-feasibility study for Bottle Creek and Mt Ida without further dilution.
Alt had originally targeted April for delivery of the study however this was postponed following delays in the receipt of final metallurgical leach results from the laboratory caused by COVID-19 operational restrictions.
The study was rescheduled for delivery this month.
It will be based on open pit mining from ten pits over six granted exploration leases, extracting a combination of oxide, transitional and fresh material in various stages of the operation’s life.