Metals X reports strong quarter as Aditya takeover advances

PERTH (miningweekly.com) – Diversified junior Metals X has reported a quarter of steady production during the three months to March, as it continued to advance its acquisition of fellow-listed Aditya Birla.

Gold production during the March quarter reached 47 591 oz, which compared with the 48 134 oz produced in the previous quarter.

The Cannon mine produced 3 505 oz of gold during the quarter under review, while the Central Murchison gold project produced 12 296 oz, the South Kalgoorlie project a further 13 006 oz and the Higginsville mine some 18 783 oz.

During the quarter, Metals X advanced its plans to restart the Fortnum gold project, with engineering and approvals work nearing completion. The operation was leveraged to take advantage of synergies with the Central Murchison gold project, and by using an existing one-million tonne a year processing plant and operating infrastructure base, which would require refurbishment.

The miner also agreed to purchase the Gunga mine at a price of A$1.5-million in cash and a further A$1-million milestone payment when production exceeded 30 000 oz/y.

The Gunga mine was expected to provided a blended feed for the Cannon plant following production at Cannon until mid 2018.

Meanwhile, tin production during the quarter reached 1 676 t, which was in line with the 1 889 t produced in the previous quarter.

In April this year, ASX-listed Aditya Birla and its largest shareholder Hindalco Industries backed an increased takeover offer from Metals X.

Metals X initially offered one of its own shares for every five Aditya Birla Minerals shares, valuing the takeover target’s shares at 24.7c each. However, in December, Metals X increased its offer to one of its own shares for every 4.75 Aditya shares held.

Both the Aditya Birla board and Hindalco, which owns a 51% interest in Aditya Birla, in April backed the increased offer which would see Metals X issue one of its own shares for every four-and-a-half Aditya Birla Minerals shares held, along with an 8c a share cash payment.

The offer valued Aditya Birla Minerals shares at 32.9c each.

The increased offer was subject to Hindalco receiving Reserve Bank of India approval.