Middle Island Resources has made a $9.4 million all-scrip takeover bid for Alto Metals, a fellow small gold miner in WA.
Middle Island is offering five Middle Island shares for every one Alto share, representing a 61 per cent premium to Alto’s last closing price.
Both companies have operations near Sandstone, a tiny township 700km northeast of Perth where gold was first discovered in 1894.
Middle Island said the merger would give Alto access to Middle Island’s processing plant, ‘an immediate, proximal and cost-effective processing solution for Alto’s gold resources that is not otherwise available to Alto’.
Middle Island bought the processing plant when Black Oak Minerals Ltd was liquidated in 2016. It hasn’t operated since 2010 but Middle Island plans to recommission it.
Both Middle Island and Alto Metals shares were unchanged at 1104 AEDT, with Middle Island at 0.9 cents and Alto Metals at 2.8 cents.
A wave of consolidation has hit the gold mining industry recently, most notably Barrick Gold’s proposed hostile takeover of USA-based Newmont Mining.