Metro Mining (ASX:MMI) has announced last month it has entered into binding agreements to increase its ownership in Gulf Alumina (TICKER) to 39% as the company will acquire the position in Gulf from four large shareholders for approximately A$8.5M. Metro has now, after several difficult months, improved its offer and is now bidding either A$0.62 per share I cash, or A$0.52 per share in cash and one share of Metro Mining (for a total value of A$0.67 as of yesterday’s closing price).
Metro continues to advance its Bauxite Hills project towards development, and we agree with the company’s perception that combining its own operations with the Gulf land package could unlock additional economies of scale, increase the production rate and extend the mine life as the total amount of DSO tonnes would practically double if both entities would merge.
Go to Metro Mining’s website
The author has a small long position in Metro Mining. Please read the disclaimer
