Diatreme Resources, an Australian silica developer and explorer, has made a takeover proposal for all ordinary shares in Metallica Minerals.

The offer is contingent upon Diatreme obtaining necessary modifications from the Australian Securities and Investments Commission (ASIC).

Under the proposed offer, Metallica shareholders would receive 1.3319 fully paid ordinary shares in Diatreme for every ordinary share held.

This exchange ratio is based on Diatreme's last stock close of $0.022 on 15 February 2024, indicating a 22.08% premium over Metallica's last closing price of $0.024 on the same date.

When considering Diatreme's 30-day volume-weighted average price (VWAP) of $0.02321, the offer translates to an implied value of $0.0309 per Metallica share, marking an attractive premium for Metallica shareholders.

Sibelco Asia Pacific, with a 16.43% interest in Metallica, has advised Diatreme that it intends to accept the offer for all its Metallica shares, subject to Diatreme securing the ASIC modifications and in the absence of a superior bid.

Diatreme Resources chairman Wayne Swan said: “Diatreme intends to put this offer directly to Metallica shareholders on the basis that it represents a compelling opportunity for the shareholders of both Metallica and Diatreme.

“We are grateful for the early support shown for this offer by Sibelco Asia Pacific, a major shareholder of both Metallica and Diatreme. This proposed transaction is a logical step in ensuring the shareholders of both companies will see the benefits of a focused silica development company optimising resources, capital expenditures, staffing, regional engagement and export solutions.

“This is expected to see us create value for the shareholders of both companies, as well as external stakeholders such as traditional owners, local business and the broader Cooktown and Hopevale communities.”