Sandfire targets MOD
SANDFIRE Resources has launched a takeover offer for MOD Resources, a WA-based explorer with a focus on Botswana, which rebuffed the move.
Following recent media speculation of a takeover, Sandfire said it had written to MOD to express its interest in acquiring 100 per cent of MOD shares, on the basis on $0.38 per share.
At stake was MOD’s 100 per cent owned T3 copper project in Botswana’s Kalahari copper belt.
Discovered in March 2016, MOD believed T3 presented the potential for a long-life, high-margin, open pit copper mine with significant exploration upside.
MOD managing director Julian Hanna said Sandfire’s offer undervalued the company’s assets.
“The unsolicited, indicative proposal for 100 per cent of the company received from Sandfire confirms the potential of the T3 copper project, however the Board considers it significantly undervalues the assets of the company,” Mr Hanna said.
Despite rebuffing the initial offer, MOD told the ASX it would be willing to engage with Sandfire and grant confirmatory due diligence should a compelling price be presented.
MOD’s refusal followed its recently completed $10 million capital raising to advance T3.
Mr Hanna said funding from the capital would enable MOD to progress the project towards a development decision, and conduct further drilling for additional resources.
“With strong ongoing support of our shareholders through a placement and a fully underwritten rights issue, we believe that the company will have sufficient working capital to achieve our objectives,” he said.
MOD expected to complete T3’s feasibility study in the first half of 2019.