At the time of writing, Rex Minerals Ltd (ASX: RXM) shares are up 65% to 45.5 cents.

Why is this ASX mining stock rocketing?

Investors have been scrambling to get hold of the copper and gold developer's shares after it received and accepted a takeover offer.

According to the release, Rex Minerals has entered into a scheme implementation deed with MACH Metals Australia.

Under the scheme, it is proposed that MACH will acquire all of the shares in Rex Minerals which it does not already own for cash consideration of 47 cents per share. This represents a 71% premium to where the ASX mining stock ended last week and values the company at $393 million.

The release notes that the MACH offer was received following a competitive global partnering process. This process was focused on the $854 million funding and subsequent development pathway for the Hillside Copper-Gold Project in South Australia.

The Rex Minerals board carefully assessed the offer against a range of other alternatives. After taking into account the risks and potential ownership dilution associated with a stand-alone development of Hillside, it decided the offer was the superior option.

As a result, the ASX mining stock's board unanimously recommends that shareholders support the transaction by voting in favour of it. This is in the absence of a superior proposal and subject to the independent expert's report.

'Significant premium'

Rex Minerals' CEO and managing director, Richard Laufmann, said:

The Transaction provides certainty of value and a significant premium representing a 98% uplift relative to Rex's 90-day VWAP, as well as the opportunity for Rex shareholders to realise their investment at a 10-year historical share price high. This Transaction also represents a more certain outcome for wider stakeholders in Hillside, including the local community, the South Australian Government and Rex employees who will benefit from the significant financial strength and proven track record of MACH to deliver the successful development of Hillside.

The South Australian Government has been a leader in Australia in support of decarbonisation and copper development. The successful development of Hillside will very much align with their strategy. Subject to approvals, we look forward to working with MACH through to completion and watching them develop the Hillside Project, Australia's largest fully permitted and shovel ready copper project.

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At the closing bell, the mineral exploration company's shares were swapping hands for 30 cents, down by 16.67%.

What did Rex Minerals announce?

A catalyst for today's fall could be concerns about an impending share dilution. According to its release, Rex Minerals has successfully raised $50 million (before costs) in a two-tranche placement.

The offer received strong support from existing institutional, sophisticated and professional investors. The company also added new institutional investors to its register.

Rex Minerals listed the issue price for 166.7 million new ordinary shares at 30 cents apiece. This reflected a 14% discount on the last closing price of 35 cents on 3 August.

The shares will be split across two separate tranches, with the first portion coming under the company's listing rule 7.1. This allows them to issue approximately 17.8 million shares without shareholder approval.

The second portion of shares (roughly 148.8 million) will be subject to shareholder approval at a meeting in September.

All the company's non-executive directors have participated in the placement, with those shares also conditional on shareholder approval.

The proceeds of the placement will be used to mostly fund pre-development activities at Rex Minerals' wholly-owned Hillside copper project in South Australia. Furthermore, the company will set aside some of the money for its 100%-owned Hog Ranch gold property in Nevada, United States.

Rex Minerals managing director and CEO Richard Laufmann commented:

This is a significant milestone for the company and for the development of the Hillside copper project. A strong appetite from institutional investors reflects support for the development thematic to be a part of this nation-building project.

The funds raised place the company in a great position to begin pre-development at Hillside whilst progressing towards a Final Investment Decision for Stage 1 late next year, as well as pursuing additional value at Hog Ranch.

About the Rex Minerals share price

It's been a wild ride for Rex Minerals shareholders, with the company's shares accelerating by almost 80% year to date. Looking at a longer time frame, Rex Minerals shares are up around 38% since this time last year.

Based on today's price, Rex Minerals has a market capitalisation of around $128.8 million, with approximately 422 million shares outstanding.

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