Junior Rox Resources said that it would accept a takeover offer for its 10% shareholding in fellow-listed Cannon Resources from Canada-based equity firm Kinterra Battery Metals Mining Fund subsidiary Kedalion Nickel.
Cannon on Thursday urged its shareholders to accept the 45c a share offer from Kandelion, with the board unanimously giving the offer its support.
In its target statement, Cannon noted that the cash offer provided shareholders with certainty of value for their shares in the company, and the ability to realise value in what was, prior to the offer, an illiquid company. Cannon noted that in the month prior to the offer, less than A$1-million worth of Cannon shares were traded on the ASX, compared with the offer value of A$45-million.
Furthermore, the cash offer also represented a 43% premium to Cannon’s last closing price and a 58% premium to the company’s 30-day volume weighted average share price, while mitigating the risks and uncertainties of remaining a Cannon shareholder, including near-term capital requirements and project development and technical risks.
Rox on Thursday said that based on its 8.5-million shares held in Cannon, the company expected cash proceeds of some A$3.8-million from the sale of its Cannon shares. This capital, along with its recently announced A$5-million share placement and share purchase plan, will be used to progress resource drilling and near-mine exploration and feasibility work at the Youanmi gold project.
The Kendalion offer is expected to close on December 21, unless withdrawn or extended.