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MOD Resources Limited (ASX:MOD) today came forward to release the acquisition offer that it has received from Sandfire Resources NL. In the media announcement to ASX, Sandfire confirmed that it is interested in exploring the option for a possible merger of MOD Resources and Sandfire Resources. For this purpose, Sandfire has valued MOD on the basis of $0.38 per share. This offer price reflects a significant premium on the last traded market price of $0.220 as on 21 January 2019.
The bidder also confirmed that any such transaction would be conditional upon the recommendation of the MOD board, the completion of due diligence, and execution of binding documentation, among other things. Given the preliminary, indicative and non-binding nature of the approach, the bidder believes that there can be no assurance at this stage whether a transaction will eventuate.
Recently, MOD Resources has confirmed the potential for expansion of T3 Copper project. The copper exploration and development company has recently discovered the new intersection on the central Kalahari Copper Belt in Botswana from its initial drilling activity undertaken at the large A4 Dome.
While the feasibility study (FS) for the T3 Copper Project is nearing completion, the company believes that the results at A4 Dome have been very encouraging. These results along with the companyâs potential to utilize capital and infrastructure planned at T3 is expected to allow the company to consider highly efficient and modern underground mining techniques as a realistic option for A4 Dome.
The Pre-Feasibility Study has earlier stated that the T3 Copper Pit Project has the potential to generate approximately US$730 million for the Base Case model over the term of 9 years. The estimate has been based on the production rate of 2.5Mtpa with a payback of 2.7 years. The PFS has also projected a 12-year Expansion Case with a 4 Mtpa production rate assuming conventional flotation processing and open pit mining with a plant throughput of 2.5Mtpa for the first three years.
For the half year ended 30 June 2018, the company posted a net loss for the period to $2.296 million compared to the loss of $2.057million reported in half year ended 31 June 2017. As per the recent quarterly cashflow report, the company had the cash and cash equivalents of $12.82 million as at 30 September 2018. It includes net cash inflow from the financing of $929,000 and a net cash outflow from investing and operating activities of $346,000 and $5,046,000 respectively.
MOD traded flat today, 21 January 2019. That means there has been no change in the daily price movement of the stock. However, the stock price last traded at $0.220. Over the past 12 months, the stock price has fallen by 64.47% including a plunge of 18.52% witnessed last month.
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