Middle Island Resources Ltd.'s proposed takeover of Alto Metals Ltd. is not expected to meet its minimum acceptance condition, with three major Alto shareholders indicating that they do not intend to approve the about A$9.4 million deal.
Alto said March 19 that it received separate notices from Windsong Valley Pty. Ltd. and Marymount Pty. Ltd. — both related parties of Alto Chairman Terry Wheeler — Sinotech (Hong Kong) Corp. Ltd. and Enterprise Metals Ltd., which collectively hold 32.12% of the explorer, that they do not intend to support Middle Island's all-scrip off-market takeover offer of 5 shares for every Alto Metals ordinary share.
The March 1 deal hinged on a 90% minimum acceptance by Alto shareholders.
Middle Island's plan for the deal involves combining its own Sandstone gold project in Western Australia with Alto's project of the same name.
Alto's deposits are expected to provide initial mill feed and critical mass to support an early recommissioning of Middle Island's gold processing plant at its own Sandstone project. Middle Island's Two Mile Hill deposits offer the option to scale up the project.
Access to Middle Island's processing plant, now on care and maintenance, will provide Alto with a processing solution for its gold resources that is not otherwise available.
Middle Island indicated that it will lodge its bidder's statement on or before April 29.