Metallica announces board revamp as Wayne Swan-led takeover gathers pace
Silica sand miner Metallica Minerals has announced a board shake-up as a hostile takeover by Wayne Swan-chaired rival Diatreme Resources gathers pace.
Silica sand miner Metallica Minerals has unveiled a board shake-up as a hostile takeover by Wayne Swan-chaired rival Diatreme Resources continues to gather momentum.
Metallica said executive chair Theo Psaros and director Mark Bojanjac would resign their board seats to more “closely reflect Diatreme’s ownership interests in Metallica”.
Diatreme now controls about 71 per cent of the shares of Metallica, which is developing one of the country’s biggest silica sand projects in far north Queensland.
Mr Psaros, a former boss of Queensland Rugby, had led board opposition to the Diatreme offer after an independent expert said it undervalued Metallica and penalised minority shareholders. Metallica thanked Mr Psaros and Mr Bojanjac for their five and three years of service respectively.
The company said Mr Psaros had agreed to make himself available until August 8 to enable an orderly handover to the recomprised board. Diatreme has nominated Greg Starr, Michael Chapman and Stephen Everett as replacement directors.
Mr Starr and Mr Chapman are current directors of Diatreme. Brad Sampson will stay on as an independent non-executive director of Metallica.
Last month, Diatreme faced a revolt from some Metallica shareholders who believed they were getting short changed in the planned hostile takeover. They had formed the Small Shareholder’s Action Group (SSAG) which managed to accumulate about 10 per cent of the company in a bid to stymie the deal.
Earlier, Metallica produced an independent expert report declaring the offer of 1.3319 Diatreme shares for every Metallica share was “not fair and not reasonable” and substantially undervalued the target.
There were fears minority shareholders of Metallica would be disadvantaged if the deal proceeded given that its biggest shareholders – Belgian resources firm Sibelco, richlister Brian Flannery and German fund Deutsche Balaton – controlled 51 per cent and are also the biggest shareholders in Diatreme.
Metallica came out swinging against the offer telling the ASX that the takeover could be a move to remove a competitor rather than a legitimate proposal to advance Metallica’s silica sand project, which is adjacent to Diatreme in Cape Flattery.
Minority shareholders were concerned about the large disparity in the expert valuations between Diatreme and Metallica, and concerns silica sand would be exported through an overseas subsidiary company – denying shareholders a return on their investment in the company.
One Metallica shareholder alleged major shareholders in particular seemed to be seeking to benefit from a merger because they have interests in both companies and reduced competition appeared to be desired.
“Silica sand is not as sexy as green hydrogen but it is essential to production of solar panels among other uses,” the shareholder said.
Diatreme chief executive Neil McIntyre said the takeover made sense and that a combined operation would have a bigger voice to government and stakeholders.
Cape Flattery in far north Queensland has been called the “Bowen Basin” of silica sand because of its export potential.
The global silica sand market is expected to grow from $US8bn in 2019 to $US20bn this year.
“We are located next to an existing world-class silica sand project and with access to key global markets, our project is well positioned to capitalise on the growing green economy,” Ms Psaros told the Queensland Mining Club last year.
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