(Yicai) May 6 -- Inner Mongolia Xingye Silver&Tin Mining, a Chinese explorer and developer of metal mineral resources, plans to acquire all shares of Australian mining firm Atlantic Tin for AUD98 million (USD63 million).

Xingye and ATL have entered into a binding agreement under which the former or its nominee will offer to acquire all the shares of the latter for 24 Australian cents (14 US cents) apiece by way of an off market takeover bid, the pair said in a joint statement on May 1. The offer will be open for acceptance until June 21, unless the period is extended beyond Oct. 31.

The offer price represents a premium of 20 percent to the price at which ATL issued shares at its last capital raising announced on Nov. 22, last year, and a premium of 1,500 percent to the price at which shares of Kasbah Resources, the former name of ATL, were traded on the Australian Securities Exchange when it delisted in September 2020.

ATL directors unanimously recommend shareholders accept the offer and said they intend to accept the offer in respect to all the shares they control in the absence of a superior proposal, the statement noted.

The offer is also supported by ATL’s largest shareholder Pala Investments, which intends to accept the offer for all of the shares it controls in the absence of a superior proposal. The Swiss investment giant owns about 71.4 percent of ATL’s issued share capital.

Pala and Xingye have also entered into a call option agreement under which the former granted the latter an option to buy 20 percent of ATL’s shares if a competing proposal is publicly announced or ATL enters into a binding agreement with a third party in relation to a competing proposal.

ATL’s primary asset is a 75 percent interest in the Achmmach Tin project in Morocco, which is being developed with its joint venture partners Toyota Tsusho and Nittetsu Mining.

“ATL’s substantial portfolio of mining tenements and operating licenses in Morocco is an excellent fit for Xingye’s expertise in non-ferrous metal mining and smelting,” said Zhang Shucheng, chief executive officer of Xingye. “The offer represents a significant milestone in Xingye’s efforts to expand its global footprint and to also contribute to economic development in Morocco.”

“The offer underlines the attractiveness of the Achmmach Tin project as a standout development opportunity, and I look forward to seeing the asset taken into production by Xingye as an experienced operator, well positioned to maximize the value of the asset for the benefit of all stakeholders,” said Simon Milroy, CEO of ATL.

The deal is subject to conditions, including a 90 percent minimum acceptance of the offer and Chinese regulatory approvals from the National Development and Reform Commission, Ministry of Commerce, and State Administration of Foreign Exchange, the statement pointed out.

Xingye announced yesterday that it or its overseas subsidiary Xingye Gold (Hong Kong) Mining plans to issue medium- and long-term offshore bonds worth no more than USD300 million. The bonds will have terms of no more than three years and interest rates based on the offshore debt market at the time of issuance.

After deducting the issuance expenses, the funds raised from the offshore bonds will be used for domestic and overseas project construction, replenishing working capital, and other general corporate purposes.

Xingye’s shares [SHE: 000426] were trading up 1.7 percent at CNY13.48 (USD1.87) as of lunch break in Shenzhen today.

Editor: Futura Costaglione