Australian copper mining company MOD Resources said Monday that the AU $ 0.38 /share bid by strong competitor Sandfire Resources undervalued the company, but said it was willing to work with its client to arrive at a “reasonable price ".
Sandfire previously confirmed its bid for AU $ 88 million ($ 62.97 million) for MOD assets, which Reuters calculates is a 73 percent premium to $ 0.22 per MOD share when last close of trading.
MOD's Perth office confirmed that a non-binding offer from Sandfire was made on January 16 following a study tour of the company to investigate the possibility of a joint venture deal.
In the same statement, MOD said it is going to raise about A $ 15 million through a share issue and placement, the proceeds of which will fund its T3 copper project in the promising region of Botswana.
MOD Managing Director Julian Hanna says Sandfire's bid “confirms the potential of the T3 copper project, but the board believes it is significantly underestimating the company's assets.”
MOD has said it is willing to partner with Sandfire and provide supporting due diligence if an attractive price is presented that will be supported by the MOD board and shareholders.
MOD appointed Sternship Advisers as financial advisor and DLA Piper as legal advisor for Sandfire's application.
