Minotaur Exploration (ASX:MEP) shares were trading flat. Here’s why

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Minotaur Exploration (ASX:MEP) shares were trading flat. Here’s why

ASX, MEP, AND, quarterly update
Image source: © Rfaizal707 | Megapixl.com

Highlights

  • Minotaur Exploration Ltd has shared the quarterly activities update today.
  • Andromeda Metals Ltd lodged scrip for scrip takeover offer with Minotaur.
  • The takeover depends on the Minotaur’s shareholders’ approval.

Australian mining and exploration company Minotaur Exploration Ltd (ASX:MEP) has shared the quarterly activities update today.

On the news of the quarterly report, shares of MEP opened 2% higher at AU$0.24 each than its previous close, although there was no change in share prices when writing this article.

Let’s look at the quarterly activities update provided by MEP.

Takeover offer

Andromeda Metals Ltd (ASX:ADN) made a scrip-for-scrip buyout offer to Minotaur on November 9, 2021. According to Andromeda, the Minotaur's board of directors unanimously approved the offer, which will conclude on January 31, 2022. Andromeda has received acceptances for the majority of Minotaur's issued shares, or 59% as of today.

The buyout is contingent on Minotaur shareholders agreeing on the separation and transfer of non-kaolin assets to Demetallica Ltd, a subsidiary company. If the shareholders approve the split, Demetallica will be demerged, and over 3300 Minotaur shareholders will receive about 1000 Demetallica shares for every 20,000 Minotaur shares owned as of the record date of 27 January 2022. Demetallica will then prepare for an IPO, and this is expected in April 2022.

Demetallica’s prospects

In December 2021, the company announced that it has agreed to form a joint venture with OZ Minerals to become a part of the Minotaur’s Peake and Denison JV project. The transaction included the sale of 70% in Eloise JV and 80% interest in Jericho JV to OZ Minerals in exchange for the AU$6.6 million cash payment and contingent performance payment.

Demetallica’s IPO foundation will be the Chimera Polymetal Project that offers a mix of copper-gold and other base metal mineral deposits. Moreover, the Chimera Polymetal Project complements the other projects such as Peake and Denison located in South Australia, Pyramid and Windsor, both are in Queensland.

Cash flow statement update

At the end of the quarter ending 31 December 2021, Minotaur had AU$2.29 million in cash, and it reported an exploration expenditure of AU$2.2 million during the quarter.

Bottom Line

MEP released an update on quarterly activity and a cash flow statement today. If Andromeda successfully gains 90% consent from Minotaur's shareholders, this might be the company's final update.

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