Middle Island Resources has announced an all scrip off‐market take‐over offer for all of the issued ordinary shares of Alto, at approximately AU$9.4 million.
The Directors of Middle Island have formed the view that the combination of the assets of the two companies creates, among other material benefits to the shareholders of the Combined Group, a company with near-term cash flow potential and considerable production and exploration upside.
Access to Middle Island’s processing plant, currently on care and maintenance, will provide Alto shareholders with an immediate, proximal and cost-effective processing solution for Alto’s gold resources that is not otherwise available to Alto.
The Alto deposits are anticipated to provide initial mill feed and critical mass to support an early recommissioning of the Sandstone gold processing plant, and Middle Island’s Two Mile Hill deposits offer considerable scale and project longevity.
Middle Island has received indicative broker support with respect to the Combined Group for an equity capital raising of approximately AU$5 million in additional funds to advance the feasibility and recommissioning of the Sandstone gold processing plant.
Rick Yeates, Middle Island’s Managing Director said that the offer was compelling for Alto shareholders, who will receive a significant premium based on the last closing price for their shares and will benefit in the future growth potential of the proposed Combined Group.
“Middle Island will integrate Alto’s assets with Middle Island’s Sandstone gold project, and immediately embark on an updated feasibility study, incorporating Alto’s Mineral Resources, to determine the economics of recommissioning the Sandstone gold processing plant,” said Mr Yeates.
“The collective Middle Island‐Alto gold assets offer a substantial growth opportunity for current and future shareholders of the Combined Group, via low capital intensity and a near-term production profile. The further potential is to significantly extend this production profile via Middle Island’s Two Mile Hill underground deposits, consolidate further proximal deposits within a 100 kilometre radius, and amalgamate an entire greenstone belt offering significant resource and exploration upside,” concluded Mr Yeates.