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Minerva Resources

  • BY: Andrew Hore |
  • POSTED: 14/06/2009 |

Dwyka Resources Ltd is moving towards an all-share offer for Minerva Resources. 

Ethiopia-focused gold and platinum explorer Minerva secured a £350,000 loan facility from Dwyka at the beginning of May 2009. Minerva has indicated that it would recommend a bid and due diligence has started.

The share offer is expected to value Minerva at not less than 1p a share. Shares in Minerva were suspended at 0.7p each on 30 January 2009. That valued Minerva at £1.08m.

Shareholders owning 44.9% of Minerva shares have indicated that they will accept the offer but these acceptances are non-binding. The majority of warrant holders have also indicated that they support the bid and they are willing to have their warrants, which entitle them to one share at 4p, cancelled so the bid can go ahead. The warrant holders meeting is on 22 June.

Dwyka has gained permission from ASX to issue shares to acquire Minerva without gaining shareholder approval. Dwyka shares are trading on Aim at 7.25p each, which values the nickel and gold explorer at £13.8m. That suggests that the shares issued to acquire Minerva should increase Dwyka’s share capital by little more than 10%. However, the share price has risen from 6p at the beginning of the month so the number of shares issued will depend on share price used.

Minerva lost £1.17m in the year to September 2008. The company has drawn down £75,000 of the Dwyka loan facility and it can draw down the other £275,000 to use as working capital while the bid rumbles on. The annual interest rate on the second tranche is 15%. If there is no bid by the end of August 2009 then the loan and interest become repayable within 30 days of Dwyka giving notice. It will be repayable in cash or shares that would give Dwyka around 25% of Minerva.

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