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  • Private Chinese firm Shandong Goldsea Group has announced a $20.7 million proposal to buy out Australian explorer Alto Metals
  • The proposal prices Alto at 6.5 cents per share — a 93 per cent premium to its average over the last month of 3.4 cents each
  • Goldsea currently operates three underground gold mines in China
  • The Chinese firm is looking to nab Alto Metals’ wholly-owned Sandstone Gold project, a lucrative gold project in Western Australia
  • Alto Metals has not made an official response to the offer that was made on Friday
  • Shares in Alto Metals gained 12.5 per cent on Friday, last priced at 3.6 cents each

Private Chinese firm Shandong Goldsea Group announced its intentions to buy out Australian explorer Alto Metals (AME) on Friday.

Goldsea is offering 6.5 Australian cents per Alto share — a strong 93 per cent premium compared to a 3.4 cents per share one-month average.

This deal values Alto Metals at A$20.7 million.

“We are convinced that our offer is a unique opportunity for Alto shareholders,”
Goldsea Group Chairman Jianjun Li said on Friday.

“The offer provides certainty of value at a genuinely attractive cash price for Alto shares.”

The most attractive trait on the table is Alto Metals’ wholly-owned ‘Sandstone Gold’ project, located in Western Australia. The project covers roughly 800 square kilometres of a historic gold mining site located north of Perth city.

“For Goldsea, this is a logical step, in line with the group’s strategy, to bring the ownership of the Sandstone Gold Project within its portfolio,” Jianjun said.

Alto management bought the Sandstone project in 2016 after buying out industry competitor, Sandstone Exploration.

“Given the nature of Sandstone Gold Project exploration and potential restart, we believe that the Sandstone Gold Project would be best placed being wholly-owned within a larger, diversified portfolio such as Goldsea’s.”

At the end of September last year, the Sandstone project was surveyed for 290,000 ounces of gold (inferred and indicated).

Goldsea Group made the multi-million dollar offer to nab the company and its project on Friday through its Australian subsidiary — Goldsea Australia Mining.

Goldsea currently owns three underground gold mining operations in China.

The Chinese company has stated it has intentions to lodge approval with the
Australian Foreign Investment Review Board ‘in the coming days’.

As of February 23, Alto Metals has made no official response to the proposal.

Shares in Alto Metals on the Australian market gained 12.5 per cent after news of the buyout bid broke. By market close, they were priced at 3.6 cents in a $10.56 million market cap.

AME by the numbers
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