- Gold explorer Alto Metals (AME) has entered a trading halt and announced a $5.1 million entitlement offer
- The offer is a one-for-four accelerated, pro-rata, non-renounceable entitlement offer and shares will be priced at seven cents each
- The funds from the raise will be used to fund drilling and exploration activities at Alto’s Sandstone Gold Project
- The capital raise comes after the company received another unsolicited takeover offer of 6.6 cents per share
- The offer was made by Habrok and is the third takeover bid in the last 15 months for the company
- Alto views the offer as ‘opportunistic’ and instead will focus the funds raised from the entitlement offer on further drilling at its Sandstone project
- Shares in Alto Metals were last trading for 7.5 cents each
Gold explorer Alto Metals (AME) has entered a trading halt, as it announces details of a $5.1 million entitlement offer amid another takeover bid.
In a statement, the company said the offer will be a one-for-four accelerated, pro-rata, non-renounceable entitlement offer, with the new shares to be priced at seven cents each.
That represents a 6.67 per cent discount on the last closing share price of 7.5 cents per share.
Meanwhile, major shareholder, Windsong Valley, will also subscribe for its full entitlement, equalling $1 million.
The funds from the raise will be used to fund drilling and exploration activities at Alto’s Sandstone Gold Project.
The capital raise comes as the company received another unsolicited takeover offer, its third in 15 months, this time from Habrok. The company would pay shareholders 6.6 cents per share as part of the takeover.
However, in a statement to shareholders, Alto Non-Executive Chairman, Richard Monti, said the offer ‘undervalue your shares and options’ by 12 per cent.
He advised shareholders to reject the lowball offer, saying it should instead be seen as an endorsement of Alto’s Sandstone Gold Project.
In particular, the funds raised from the entitlement offer will be spent on infill and step-out drilling at the project’s Lord Nelson mine.
“In the opinion of your Directors, the Habrok offers do not adequately reflect the unrealised potential of Alto’s Sandstone Gold Project and does not recognise the exploration potential at Alto’s extensive tenement holdings,” Richard said.
Alto Managing Director, Matthew Bowles, said the takeover bids were hampering progress.
“For well over 12 months, the company has been hampered with multiple, opportunistic, unsolicited approaches, rather than being able to focus on exploration to realise value at the Sandstone Gold Project,” he said.
“We are excited to have recommenced drilling at Lord Nelson to follow up on our latest results, which demonstrated the continuity of high-grade mineralisation. Lord Nelson is a priority focus for us and we expect further drilling will lead to additional resource growth from the known mineralisation that remains open down plunge and along strike to the south of the pit,” he added.
Shares in Alto Metals last traded for 7.5 cents each on July 10.