Christian Candy, the multi-millionaire property developer, has launched a move through his Solomon Capital vehicle to buy Metals Exploration Plc (LON:MTL) in a 13p per share cash offer that values that AIM listed mining group at £35.76m. Candy has been steadily building his stake in MetEx for some time and took his holding from 29.9% to 44.1% when it raised £12m in a share placing in May 2009. At the time, Candy said the company was significantly undervalued with substantial upside potential.
Since its admission to AIM in October 2004, MetEx has focused its efforts on the acquisition and development of exploration properties in South East Asia. In May it announced the results of a feasibility study and a resource update for its flagship Runruno gold-molybdenum project on the island of Luzon in the northern Philippines. The study confirmed the viability of a project producing an average of 96,700oz of gold per year over a mine life of 10.4 years. In reserves, 780,000oz gold were classified, for the first time, as proven and probable. Average forecast operating costs stand at $477/oz gold, and capital costs are forecast to be US$149.3m.
Candy’s move on MetEx values the company at a premium of around 26.83% to its closing price of 10.25p per share yesterday. Solomon is understood to have received letters of intent to accept the offer from certain other shareholders, together holding approximately 9.03% of the share capital. If it gains control of MetEx, Solomon said it would continue to work with the existing management team to secure appropriate funding for the development of a mine at Runruno.
£35.7m? That's a bargain and a half.
Serves Mr Beardsworth right for listing his vehicle on a market that doesn't understand mining ...
