Key points
- Investors have responded well to Minotaur's quarterly cash flow and activities update for the period ended 31 December 2021
- Minotaur's cash position took a backward step at the end of December, resulting in a 46% decline in cash and cash equivalents
- The company also gave an update on the proposed takeover offer from Andromeda Metals
Minotaur shares have climbed more than 17% this year to date.
Shares in mining and resources company Minotaur Exploration Ltd (ASX: MEP) are inching higher in afternoon trade and are now swapping hands at 23.5 cents apiece.
Investors have responded well to Minotaur's quarterly cash flow and activities update for the period ended 31 December 2021. In the report, the company also covered details of the proposed merger with Andromeda Metals Ltd (ASX: ADN). Here are more details.
Why's the Minotaur Exploration share price edging higher?
The company advised that it held cash of $2.29 million following an exploration expenditure of $2.2 million at the end of the quarter.
Minotaur's cash position took a backward step at the end of December, resulting in a 46% decline in cash and cash equivalents from $4.24 million in the previous quarter.
Factoring in all available sources of liquidity, Minotaur estimates it has $5.81 billion in total available funding for future operating activities. This gives the company an estimated 2.69 quarters of runway at its current burn rate.
Minotaur also gave an update on the proposed takeover offer from Andromeda Metals that first surfaced in November 2021.
Back then Andromeda lodged a scrip for scrip takeover offer by a subsequent bid implementation agreement. Minotaur then put the proposal to shareholders via a bidder's and target's statement in December.
The company says that as of 18 January, Andromeda had "received acceptances for 59% of Minotaur's issued shares".
Minotaur's board also unanimously recommended shareholders accept the offer, which Andromeda stated is due to close on 31 January 2022, per the release.
Not only that, but the takeover is "conditional, primarily, on Minotaur's shareholders approving the separation of Minotaur's non-kaolin assets and their transfer to subsidiary Demetallica Ltd, with Demetallica to be formally demerged from Minotaur".
Demetallica will prepare for an initial public offering (IPO) and ASX listing in April 2022 according to the company's announcement.
Under this arrangement, Minotaur's roughly 3,300 shareholders will receive around 1,000 new shares in Demetallica for each 20,000 Minotaur shares held, subject to that approval at a meeting on 20 January 2022.
Aside from this update, Minotaur also rehashed the seven market-sensitive updates it released in December, that's seen its share price climb more than 20% in the last month.
Minotaur Resources share price snapshot
In the last 12 months, the Minotaur share price has climbed over 38% after rallying 20% in the past month.
This year to date it has jumped out of the blocks as well, spiking over 17% since January 1.
Each of these returns has outpaced the benchmark S&P/ASX 200 Index (ASX: XJO)'s return within the last 12 months.
