Resources Top 5: Fortescue splashes cash on $254m iron ore takeover target Red Hawk

Fortescue has made a $254m takeover bid for iron ore developer Red Hawk Mining, owner of the Blacksmith project in WA’s Pilbara.

Red Hawk's board has agreed to a $254m FMG takeover. Pic: Getty Images

• Twiggy's Fortescue swoops on Red Hawk

• Small cap investors Tolga Kumova and Evan Cranston back Torque/Aston Minerals merger 

• EV Resources to acquire antimony mine in Peru 

Your standout small cap resources stocks for Tuesday, January 28, 2025. 

RED HAWK MINING (ASX:RHK)

Mining giant Fortescue (ASX:FMG) has made a $254m takeover offer for iron ore developer RHK, operator of the Blacksmith project, the largest DSO asset in the Pilbara that isn’t owned by one of the big five producers.

RHK’s board has unanimously recommended that shareholders accept the offer, which will increase from $1.05 per RHK share to $1.20 if FMG obtains a relevant interest in 75% or more of RHK shares within 7 days of the offer being open. RHK's two largest shareholders own over 80% of the company between them.

“Having carefully considered the merits of the offer, the Red Hawk board has unanimously concluded that the base offer price and the increased offer price are at an attractive level, with both representing a strong premium to recent trading,” RHK chair Cheryl Edwardes said.

“Whilst we firmly believe that the Blacksmith project has the potential to be a major iron ore project, there is significant cost, time and risk associated with developing a project of this scale.

“As such, the board believes that the Offer provides shareholders with a compelling opportunity to de-risk their investment and realise certain value at an attractive premium to historical trading levels leading into the announcement of the offer.”

RHK was 2024’s top iron ore performer while most iron ore stocks fell by an average of 28%.

A May pre-feasibility study suggests a 5Mtpa operation could cost $217 million to build, exporting a 60.5% Fe for 23 years at C1 cash costs of US$51/t.

ASTON MINERALS (ASX:ASO)

Leading small-cap investors Tolga Kumova and Evan Cranston are collectively investing $1m into TOR at $0.05 per share and backing its merger with Aston whereby TOR will acquire 100% of Aston in an all-scrip transaction.

The merger will see the two combined entities share 1.75Moz in gold resources across two exploration projects in Canada and Australia with pro-forma cash of over $5m to propel ongoing gold exploration activities.

Evan Cranston has been appointed to the board of Torque as non-executive director and upon completion of the merger, Tolga Kumova will also be invited to join the board of Torque with Cristian Moreno and Andrew Woskett to remain in their respective roles of managing director and chairman.

Cranston is principal of advisory services firm Konkera Corporate and was instrumental in the recapitalisation and asset transactions of several ASX companies including Draig Resources’ acquisition of the Bellevue Gold project, Boss Resources’ buy of the Honeymoon project and New Century Zinc’s purchase of the Century mine.

Kumova burst to prominence as a mining investor shortly after his departure from graphite miner Syrah Resources (ASX:SYR) in 2016.

What followed was a sort of Annus Mirabilis for Tolga, whose positions in Syrah, New Century Resources (ASX:NCZ), European Cobalt (now Aston) and Bellevue Gold (ASX:BGL) propelled him into the consciousness of investment circles as a name to look out for.

He became a young rich lister, reported at the time to have a net worth of around $95m.

The merged entity will benefit from a strong cash position and a refreshed board to drive the next phase of exploration growth across the Paris gold project in WA and the Edleston asset in Ontario, Canada.

While Edleston is a longer term prospect, Paris is strategically located in the Goldfields region of WA, where a number of juniors are looking to enter production quickly through toll treatment deals.

EV RESOURCES (ASX:EVR)

After several months of researching antimony markets, EVR has reached an agreement to acquire 70% of an operating JV over the Los Lirios antimony mine in Oaxaca, Mexico.

The project consists of four licences covering 1652ha (16.52km2), three open pits, and several underground workings on a 7km trend that date back several generations.

EVR managing director Hugh Callaghan said the company has been intrigued by antimony for some time.

“It has many deep and flexible markets with mature technologies and minimal risk of substitution,” he said.

“The depletion of Chinese resources and consequent suspension of exports comes after decades of minimal exploration for antimony and closure of most mines outside of China.

“We are satisfied that antimony has the characteristics of a real, and sustainable market, and we are equally convinced that low-cost jurisdictions with skills for mining on a relatively small scale, such as in Mexico, are essential.”

EVR has commenced due diligence and planning for an exploration program.

By the end of March, EVR plans to begin the search for a suitable plant location, and proceed to a program of sampling and trenching, with a view to defining drill targets at Los Lirios.

AUSQUEST (ASX:AQD)

(Up on no news)

AQD tripled its share price last week after finding a potentially large-scale Peruvian copper prospect.

Maiden drilling uncovered broad zones of visible copper mineralisation – oxides and sulphides – in seven of the eight holes for 3000m. The best hit of two for which assays have been returned included 348m at 0.26% Cu and 0.06ppm gold.

Assay results from the remaining six drill holes are expected by early February.

Estrella Resources (ASX:ESR)

(Up on no news)

ESR discovered some high-grade manganese in Timor Leste back in April last year and is now preparing for a reverse circulation drilling program.

The company is rolling out IP surveys over the over the newly discovered Ira Miri manganese zone within its licenses in Lautém and is also progressing approval to access these areas for drilling along with its Sica and Lalena prospects, and the Samalari Prospect in Baucau.

ESR is hoping to begin drilling in the first or second quarter this year, targeting the Samalari, Ira Miri, Sica and Lalena prospects which have all been the subject of the recent IP trial.

That data is undergoing final modelling and correlation with the geological sections.

The resulting targets are being finalised ahead of drill and road access planning, environmental surveys, cultural surveys and government environmental approvals.

Originally published as Resources Top 5: Fortescue splashes cash on $254m iron ore takeover target Red Hawk