Australian-based Myanmar Metals (MYL) is planning to either divest its 51% stake in the Bawdwin project or the company as a whole, as a result of political unrest in the country.
The move follows the completion of Myanmar Metals’ detailed review of its assets and operations in the country due to the state of emergency declared in February 2021 after a military coup.
Amid the unstable operating environment, the firm is said to have been facing difficulties in raising capital of more than $300m required to develop the Bawdwin silver, lead, and zinc project.
In a press statement, Myanmar Metals said: “It is the board’s view that the procurement of project finance in the near term by the company would be extremely problematic and realistically unlikely.”
Since the declaration of the state of emergency, all the parties that had earlier expressed interest in funding the project have withdrawn, the firm said.
However, Myanmar Metals stressed that the possibility of a sale is still uncertain, as is the valuation and timeframe of any potential deal.
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The company noted that it would lose nearly all of its $8.37m (A$11.4m) cash reserves in less than a year if it were to remain active in the Bawdwin project.
Myanmar Metals also said that it has received a takeover offer of $48.57m (A$66.5m) from China-based Yintai Gold.
Under the non-binding offer, Yintai Gold proposed to acquire all the ordinary shares on issue in Myanmar Metals at A$0.035 apiece.
Myanmar Metals executive chairman and CEO John Lamb said: “We will work with Yintai Gold to enable their due diligence process with the aim of entering implementation agreements and presenting a formal offer to shareholders. We will also continue to seek other potential acquirers.
“Shareholders will note from the Yintai proposal that we have been actively seeking to secure a divestment outcome. We will continue to pursue the most favourable outcome for shareholders.”