The optimism around the Aeris acquisition proposal to Glencore has taken the miner up on the Australian Securities Exchange today. Aeris stock price surged 3.226% in mid-day trade after the company announced that negotiations with Glencore about buying an underground copper mine in central-western New South Wales remain ongoing.
In today’s market update, Aeris Resources Limited (ASX: AIS) stated that discussions with Glencore regarding the proposed acquisition of CSA mine are continuing; however no concluded agreement has yet been reached on the transaction, nor the funding structure.
It relates to the proposal announced by Aeris Resources on 20 March 2019. Aeris made an offer to acquire the CSA mine from Glencore at a purchase consideration of $US575 million in cash and shares mix plus a royalty payable to Glencore.
The cash component of the offer comprises of approximately US$525 million and share component of approximately US$50 million worth Aeris shares. However, the company has yet not finalised the funding for the offer.
Aeris earlier informed that it is looking forward to funding the acquisition through a combination of debt and equity. The company has proposed to raise between US$250 million and US$300 million via a debt facility, within the range of US$185 million and US$240 million via an equity capital raising, and a silver stream of US$35 million – US$40 million.
The company told that the finalisation of size and participants in the components of the raising is underway. However, it is in talks with Orion Mine Finance, Special Portfolio Opportunity V Limited, and others. Aeris reported that RBC Capital Markets and Macquarie Capital are managing the equity component of the raising.
It has also been confirmed by the company that there is no certainty for the potential transaction to proceed. Moreover, there are several conditions attached to the completion of the transaction, including the requirement for shareholder approval.
Recently, Aeris provided the drilling-related information on Torrens Joint Venture held with Argonaut Resources NL. The announcement read that drilling has recommenced at Lake Torrens in South Australia, targeting the massive Torrens copper-gold anomaly.
Aimed at exploring for iron oxide-copper-gold systems within in the highly prospective Stuart Shelf region of South Australia, Torrens Joint Venture is reportedly committed to an initial 8 to 10 hole, $5,000,000 program which is part of an extensive 25-30 hole, $15,000,000 program, expected to take 18 to 24 months.
The joint venture partners informed that the drilling has again been started within the Torrens anomaly at the third prioritised copper target. This follows the intersection of artesian ground water at depth in the initial round of drilling that started on 20 January 2019.
AIS stock last traded at $0.160, up 3.226%, on 2 April 2019. The stock closed at a price to earnings multiple of 0.470x with a market capitalisation of $70.64 million.
Over the past 12 months, AIS has achieved a positive price change of 13.77% despite the plunge of 16.22% recorded in the last three months.
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