New World Resources agrees to $185m takeover proposal from Central Asia Metals

UK base metals giant Central Asia Metals has entered into an agreement to acquire Australian junior explorer New World Resources (ASX: NWC) in a $185 million all-cash scheme implementation deed.

The deal follows the completion of a competitive financing and strategic partnering process by New World, which attracted the interest of multiple Tier-1 entities including precious metals streamers and specialist mine financiers.

In deciding on the best course of action, New World took into consideration the development risks, future shareholder dilution and timeline associated with a standalone development of its flagship Antler copper project in northern Arizona.

Global copper demand

The Antler project – which has a resource of 14.2 million tonnes grading 3.8% copper equivalent – is poised to capitalise on an anticipated surge in copper demand as part of the global energy transition.

The operation will produce copper, zinc, lead, silver and gold in three separate high-grade, low-impurity concentrates for further refinement at off-site smelters either in the US or overseas.

New World has been developing Antler as an underground mine in an effort to minimise the project’s surface footprint and environmental impact.

Terms of the deal

Central Asia Metals will pay $0.05 per New World share, representing a 78.6% premium to the company’s last closing price of $0.028 on 20 May, a 114.2% premium to its 60-day volume-weighted average price and a 150% premium to the price New World set for its $14 million capital raising in March.

Central Asia will fund the purchase from its existing cash reserves and a US$120m credit facility the company has arranged with a syndicate of leading international banks.

New World’s board of directors has unanimously recommended that shareholders vote in favour of the scheme, believing the acquisition presents “the most attractive, certain and accelerated realisation of value”.

Best shareholder outcome

New World’s managing director Nick Woolrych said the deal represented the best outcome for shareholders.

“We decided to pursue this transaction [with Central Asia Metals] despite receiving exceptionally strong interest from Tier-1 project financiers and strategic partners, which we believe reflects the quality of the Antler project and its inherent strategic value in the global copper landscape,” he said.

“Ultimately, the board believes it offers a superior risk-adjusted outcome compared to a standalone development of Antler and allows shareholders to crystallise their investment at a significant premium without the risks associated with a longer-term standalone financing and development pathway.”

Effective steward

Mr Woolrych said Central Asia Metals would be an effective steward for Antler’s development.

“Central Asia has a strong balance sheet and extensive underground mining and operating expertise and will combine with our own established US operations team to bring this high-quality underground copper asset into production,” he said.

“We […] look forward to working closely with Central Asia to complete this acquisition and ensure a strong future for the Antler project.”