MetroCoal has submitted a bid to acquire Brisbane-based Cape Alumina, which controls about 1,900km² of exploration tenements in western Cape York, Australia.
MetroCoal made an unconditional cash offer to acquire all Cape Alumina's shares through an on-market bid, offering the firm's shareholders 0.6 cents for every share held.
Australia-based MetroCoal said that by acquiring Cape Alumina, the company may expose its shareholders to the diversified bulk commodities of bauxite and thermal coal for a relatively small capital outlay.
The company noted that it is seeking control of Cape Alumina to diversify its asset base and risk profile, to provide it with stronger near-term and long-term project pipelines.
After gaining control of all Cape Alumina shares, MetroCoal said it will continue to engage with the Queensland Government to ensure that the Bauxite Hills project is proceeded.
The company will support Cape Alumina in future re-submissions to the Queensland Government to develop the Aurukun bauxite deposit.
MetroCoal said it will use its surplus cash to facilitate the funding of Cape Alumina's bauxite projects, in particular the Bauxite Hills project, in a period of strong global bauxite markets with a view to commercial production and corresponding generation of positive cashflows.
Cape Alumina has set an exploration target of 300 million tonnes to 400 million tonnes of in-situ bauxite and to date, the company has identified seven priority bauxite exploration areas.
The company also holds two granted exploration permits for minerals and one application for exploration permit for minerals over Central Queensland bauxite projects.