Mineral sands producer Melior is still keen on shifting from Canada to Oz
Link copied to
Mineral sands producer Melior Resources is still pursuing its goal of breaking onto the ASX despite not being able to get a previous deal across the line.
The company is currently listed on Canada’s TSX-V, but chief Mark McCauley told delegates at the Mineral Sands Conference in Perth that moving across to the ASX is “something that’s attractive to us”.
“Our project is in Australia, our management team is in Australia,” he said.
“The TSX-V is actually going through quite a pronounced lull at the moment with respect to capital markets backing small projects, particularly ilmenite projects or mineral sands projects.”
Mr McCauley told Stockhead he didn’t have a specific timeframe in mind, though he would like to see Melior listed on the ASX by the end of this year.
The company would retain its TSX-V listing and be a duel listed entity with its primary listing on the ASX.
Melior would look to raise at least $5m ahead of an ASX listing to help fund the optimisation of its Goondicum ilmenite mine in Queensland and to grow its portfolio.
Ilmenite is the main source of titanium dioxide – which is a white pigment used in paints, fabrics, plastics, paper, sunscreen, food and cosmetics.
Mr McCauley said Melior may look to raise more cash if it finds a suitable project.
“The over riding issue is the depressed current share price and we really need to get the value of a well performing operational asset (Goondicum) fairly reflected in the share price prior to any raising,” he explained.
Melior tried late last year to get a merger deal with Metallica Minerals (ASX:MLM) over the line, but revealed just after Christmas the deal wouldn’t be going ahead.
“We did negotiate a binding merger with an ASX-listed company,” Mr McCauley said.
“That was probably one of the things that we didn’t get right in 2018. That agreement subsequently terminated in that last week between Christmas and New Years and we put a lot of effort into that.
“I thought it was a win-win situation, but a small group of shareholders in that group obviously thought differently.
“So we put that behind us and moved on. We’re still open to that sort of transaction.”
Mr McCauley said Melior’s options did include another potential backdoor listing, but he would need to have “high confidence” any such deal would reach completion before the company went down that path again.
Melior is in the process of ramping its Goodicum mine up to full production and is on the lookout for other advanced stage assets.
“We will continue our M&A search,” Mr McCauley said.
“We can only do that off the platform of a successfully operated project, which Goondicum should become in the next couple of months.
“My own view at being successful in building companies in the past is there is only a certain amount of juice that we can squeeze out of Goondicum.”
Goondicum will produce 160,000 tonnes each year of ilmenite.
The mine is expected to be cash-flow positive by mid-2019, generating $US92m ($128.8m) over its nine-year life.
Mr McCauley said the upside for Melior is in M&A.
“It’s about having patience and waiting for the right opportunity which is a win-win,” he said.
“We are not in exploration, so we’re not interested in acquiring or merging with exploration-type assets.
“We want to look at late stage development type assets which we can actually fund and then build those projects in a short period of time.”
Mr McCauley said there is even the possibility of expanding into other high demand products.
“With operating capability and marketing capability particularly in China, there’s a couple of other products we can branch out into [like] silica sands … but fair to say as we get Goondicum up and running, we can become increasingly picky about who we partner up with,” he said.