Wednesday saw New Century Resources throw in the towel and capitulate to the unsolicited $1.10 per share cash bid from South African precious metals miner Sibanye-Stillwater.
The South African company said on Tuesday that it had lifted its stake in New Century Resources to nearly 71% – on the day it sent out its bidder’s statement and on Wednesday, March 8, the Australian company told remaining shareholders to take the money and run.
The win comes only two weeks after the South African company started its hostile bid which valued New Century at $144 million. It started its offer with a 19.9% holding in New Century and had virtual control by the end of February with more than 57%.
Sibanye-Stillwater has said it wants to delist New Century from the Australian Stock Exchange once it gets more than 75% of the stock, so it will now be flooded with acceptances.
“Given that Sibanye Australia currently has voting power in 70.55% of the shares, Sibanye Australia believes the likelihood of a competing proposal emerging for New Century is low,” the company said on Tuesday.
On Wednesday new Century said the South African company had lifted that to more than 73% and “The Board unanimously recommends that shareholders ACCEPT the Sibanye Offer, in the absence of a competing proposal.”
New Century said on Wednesday Sibanye has already acquired a relevant interest in 73.41% of New Century and therefore control. “In these circumstances, the Board considers it unlikely that a competing proposal will be forthcoming. The Board confirms it has not received any competing proposals.”
“As noted in the half-year accounts to 31 December 2022, a material uncertainty exists that may cast significant doubt on New Century’s ability to continue as a going concern.”
New Century’s assets consist of the Century zinc mine in north Queensland. Operations were placed on care and maintenance in 2016, following depletion of the original open pit reserves after producing and processing on average lead and zinc concentrates for 16 years.
New Century converted the existing processing infrastructure to enable re-processing of legacy tailings waste dumps. The update was completed in August 2018 and the company mining the tailings since then
The zinc mine is expected to run out of ore in 2027, with indicated and inferred resources holding an opportunity to extend operations beyond 2030.
New Century also has the Silver King lead-zinc-silver deposit in Queensland and an option over the old Mt Lyell copper mine in Tasmania.
On January 23 this year 2023, the company said it had completed a Pre-Feasibility Study for Mt Lyell “which demonstrated highly attractive economics through the potential development of a low-cost, long-life copper and gold operation in a Tier-1 jurisdiction, supplied by 100 percent renewable power.”
But that will be for the new owners to determine.
The company’s future before the bid was problematic It incurred a net loss after tax of $28,480,467 in the six months to December. “Net cash outflows from operating activities were $16,194,985 for the period,” the company said.
“As of 31 December 2022, the Group had a net current asset deficiency of $31,102,783 after including $32,817,704 of current liabilities relating to the Australian dollar zinc hedge. These derivative financial instruments hedge against future forecast sales for which no assets are recognised.
“These conditions, specifically the net current asset deficiency and factors affecting the Group’s ability to continue to access its Environmental Bond Facility (Amended EBF) signed in August 2022 indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern and therefore whether it will be able to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.”
That Environmental Bond covers the Century mine in Queensland.
