Minotaur Resources (ASX:MEP) share price spikes on Andromeda, quarterly update

Here’s the latest out of Minotaur’s camp – and the Andromeda offer is front and centre.

| More on:
Rising share price chart.

Image source: Getty Images

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.

Should you invest $1,000 in Minotaur Resources right now?

Before you consider Minotaur Resources, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Minotaur Resources wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

The author has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Mergers & Acquisitions

businessman takes off with rockets under feet
Mergers & Acquisitions

Boom! Here’s why the Havilah Resources share price just exploded 165%

A potential $205 million acquisition has got the market excited over this metals explorer.

Read more »

a man clasps his hand to his forehead as he looks down at his phone and grimaces with a pained expression on his face as he watches the IAG share price continue to fall
Mergers & Acquisitions

Brambles share price sinks 7% after takeover talks collapse

Brambles shares are in reverse on Tuesday after takeover talks collapsed...

Read more »

A woman pulls devil rock'n'roll hands and sticks her tongue out whilst headbanging, she's rocking it.
Mergers & Acquisitions

Here’s why the Brambles share price is rocketing 11% on Monday

The company confirmed it's in takeover talks this morning.

Read more »

Rocket powering up and symbolising a rising share price.
Mergers & Acquisitions

Infomedia share price rockets 30% following takeover approach

Infomedia shares are rocketing after receiving a takeover approach...

Read more »

A man in a suit looks surprised as he looks through binoculars.
Mergers & Acquisitions

Brambles share price on watch as takeover talks confirmed

The ASX 200 pallet maker could soon face a $20 billion takeover bid.

Read more »

an attractive woman gives a time out signal with her hands, holding them in a T shape, indicating a trading halt.
Mergers & Acquisitions

Infomedia share price halted amid takeover approach

Infomedia is a takeover target

Read more »

a woman drawing image on wall of big fish about to eat a small fish
Bank Shares

NAB share price lifts amid Suncorp rumours

NAB shares are up amid acquisition rumours.

Read more »

a medical researcher rests his forehead on his fist with a dejected look on his face while sitting behind a scientific microscope with another researcher's hand on his shoulder as if giving comfort.
Mergers & Acquisitions

CSL share price cracks under Vifor Pharma acquisition delay

Regulatory delays are causing concern...

Read more »