Consortium Eastern Field Developments has stepped up its attack on Finders Resources in its bid to convince shareholders to accept a $178 million takeover offer for the ASX-listed copper miner.

Eastern Field, which was established in the British Virgin Islands specifically to launch the takeover bid, today “alerted” shareholders to the fact that Finders (ASX:FND) has reported two production and cost guidance downgrades since the bid was announced in October.

“Given Finder’s heavy indebtedness, minimal cash reserves and short remaining mine life, Eastern Field is deeply concerned by the Wetar production downgrades and adverse cost guidance unveiled since we announced our takeover proposal,” director David Fowler told shareholders.

“As an example, the latest low end of production guidance is approximately 43 per cent lower than original nameplate guidance.

“It is usual for takeover targets to pull out all stops and deliver an above-expectation performance. Finders is doing the opposite with its production downgrades and adverse cost guidance.”

Finders shares over the past year. Source
Finders shares over the past year. Source

In October, the consortium slapped a $178 million hostile takeover bid on the table for the copper miner, pricing its shares at 23c each.

Finders shares are now trading at 23.5c and did not move on the release of the “alert” this morning.

Eastern Field owns 19.8 per cent of Finders through shares held by Provident Minerals, Indonesian investment firm Saratoga and Indonesian copper-gold miner Merdeka.

The jewel in the crown for Eastern Field is Finder’s sole project, the Wetar copper mine which lies on an island in eastern Indonesia.

Singapore-based investment company Provident’s subsidiary Provident Minerals has been on Finders share register since 2012 and has been an active supporter of Finders.

Provident has helped the company successfully achieve Indonesian regulatory approvals for Wetar and introduced leading Indonesian investment company Saratoga as a shareholder back in 2013.

Provident is also the founder of the other consortium partner Merdeka and still has a significant shareholding in the Indonesian copper-gold producer. Merdeka is operating and developing the massive Tujuh Bukit project in Indonesia.

Provident Minerals tried to sell its Finders shareholding prior to making its unsolicited takeover bid, but was unsuccessful.

Eastern Field claims that recent news by Finders that it has achieved recoveries of 88 per cent from the Lerokis open pit at the Wetar project are “not based on reasonable assumptions and should simply be ignored.”

“Finders’ own competent person concluded that no change should be made to average metallurgical recoveries of 62.9 per cent in their reserve report on Lerokis,” Mr Fowler said.

“We would expect that Finders’ independent experts will address these and other concerns about the Wetar project in the independent expert’s report, to be included in Finders’ target statement.”

Eastern Field says its bidder’s statement clearly highlighted Wetar’s underperformance relative to the original nameplate guidance of 28,000 tonnes and the risks for further downgrades.

Finders plans to release its target’s statement in early December and has reiterated its “take no action” advice to shareholders.

The company has been contacted for comment.