Eastern Field claims point in hostile play for Finders
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Eastern Field Developments has managed to change the minds of some Finders Resources’ shareholders, with the suitor raising its stake in the ASX-listed copper miner to nearly 25 per cent.
The consortium originally held a 19.8 per cent stake and by mid-December had only increased its ownership by 0.4 per cent since the offer opened on November 20.
Eastern Field — which comprises Provident Minerals, Indonesian investment firm Saratoga and Indonesian copper-gold miner Merdeka — tabled its 23-cent-per-share off-market offer in October.
Eastern Field now says it is starting to get some traction.
“We are pleased that acceptances are starting to roll in,” a spokesman for the group said.
“It was always going to take time for shareholders to dissect Finders’ target’s statement. And like us, there clearly are shareholders out there who are deeply concerned by some of the flaws contained in the target’s statement.”
Eastern Field previously flagged concerns over production and cost guidance downgrades since its $178 million bid was announced in October.
The consortium has asked Finders, independent expert Deloitte, and technical expert BDA to address its concerns.
But Finders boss Barry Cahill is not concerned that Eastern Field has received more acceptances.
“Shareholders have got their own decisions to make and we put out information into the market which demonstrates the value in Finders,” he told Stockhead.
So far, shareholders that collectively own 33.19 per cent have promised to stand by the company.
Finders has also received further informal expressions of support from shareholders.
“Support has been coming from shareholders unsolicited saying to us ‘continue to do what you’re doing’,” Mr Cahill said.
“Obviously the Eastern Field consortium want the asset so there must be some value. They can conduct a big negative campaign, but the fact remains they still want to buy the asset and they want to buy it cheap. Otherwise if the asset wasn’t valuable, why are they trying to buy it?”
While Finders is expecting copper output from Wetar to be at the bottom of its 4000 to 5000 tonne target for the December quarter, Mr Cahill said Finders is seeing improvements in production.
“For the previous three quarters we produced really well, and we’ll get back up to that as quickly as we can, but being a heap leach these things take time,” he said.
“We’ll get back up to where we were, and we’ll get back to making $US20 million EBITDA a quarter, which is what we were doing, and pay off the debt and repatriate funds and pay a dividend. So that’s still our target.”
The Wetar mine was producing over 6000 tonnes of copper previously. Finders is on track to meet its target by the end of the March quarter.