Bastion Mining, an Australian Securities Exchange (ASX)-listed exploration company, has entered into a bid implementation agreement with Mongolia-based mining company Xanadu Mines to make an off-market takeover bid.
Under the agreement, Bastion will offer to acquire all the fully paid, ordinary shares issued in Xanadu at A$0.08 per share.
The proposal values Xanadu’s total equity at A$160m ($102.4m), not taking into account the planned issuance of shares to Bastion.
Bastion represents a consortium including Boroo, a private Singapore-incorporated entity, and Xanadu director Ganbayar Lkhagvasuren.
Xanadu’s Takeover Board Committee, after careful consideration with advisers, has endorsed the offer, suggesting that shareholders accept it unless a better proposal emerges.
The offer hinges on Bastion securing a minimum 50.1% interest in Xanadu and is subject to several conditions outlined in the bid implementation agreement.
To support Xanadu during the offer period, Bastion has agreed to a share subscription agreement for an additional 286.8 million Xanadu shares at A$0.06 each.
This agreement, set to complete on 26 May 2025, will result in a A$17.2m cash injection for Xanadu and increase Bastion’s stake in the company.
Xanadu executive chairman and managing director Colin Moorhead said: “The proposed acquisition of Xanadu by Bastion is aligned with the company’s strategy of generating returns for shareholders and also providing a liquidity event. Bastion’s offer provides Xanadu shareholders with an attractive premium, which recognises the company’s inherent value and considerable achievements in progressing the Kharmagtai copper-gold project.
“The Takeover Board Committee Directors consider the offer to be in the best interest of shareholders and unanimously recommend that shareholders accept the offer in the absence of a superior proposal and subject to the Independent Expert concluding (and continuing to conclude) that the Offer is fair and reasonable.”
During the offer period, Xanadu is obligated to refrain from exercising any of the put options outlined in the joint venture (JV) shareholders’ agreement. These put options, if utilised, would require Jinping (Singapore) Mining to purchase a 25% or 50% stake in Xanadu’s ownership of Khuiten Metals.
The JV shareholders’ agreement dated 21 December 2022 between Target, Jinping Mining and Khuiten Metals established an incorporated JV for the Kharmagtai project.
Lkhagvasuren said: “Together with my partners at Boroo, I am pleased to be making this supported offer to Xanadu shareholders. The Bastion offer provides Xanadu shareholders with the certainty of cash at a significant premium to Xanadu’s share price, against a market backdrop of considerable uncertainty.
“Bastion is ideally positioned to advance Kharmagtai to the next stage of development with the benefit of Boroo’s experience in acquiring, financing and developing mining operations in Mongolia.”
In July 2024, Bastion Minerals entered an agreement to purchase three copper projects in Canada.
