Abra Mining Ltd shares rose by more than 20% after the company recommended the takeover offer of Hunan Nonferrous Metals Corporation. The Chinese company currently is a majority stockholder of Abra Mining holding 74% shares of the company.
It has offered a $57.5 million dollar cash takeover bid to Abra Mining at $0.40 per share which the base metal explorer’s board of directors had unanimously recommended. The flagship asset of Abra Mining is the lead, silver, zinc, copper and gold deposit in the Mulgul project in central Western Australia.
Abra Mining’s non-executive director Jeffrey Moore said that they had managed to negotiate an attractive proposal for the minority shareholders. Mr Moore said that the offer is a premium of 90 per cent to the one-month volume weighted average price at March 29 and provides certainty of value to shareholders.
The executive director of Hunan Nonferrous Li Li said that the offer it had made was a compelling one given that it was a 100 % premium to the closing price of the Abra mining shares last Tuesday. The sale will give new life to the company as Abra Mining has reported a net loss of $986,000 in the year up to 30 June 2010.