Alto Metals Ltd (ASX:AME) has released a letter to shareholders today starting that is board unanimously recommends that shareholders reject the takeover offer from Middle Island Resources (ASX:MDI).
The letter said: “Middle Island’s understanding of the value of Alto has clearly increased through their presence in the Sandstone Goldfield.
“Your directors believe that Middle Island now recognises the inherent value of Alto’s Sandstone Project and the 818 square kilometres of the historic Archaean Sandstone Goldfield controlled by Alto, which your directors have long believed to be one of the most prospective gold provinces in Western Australia today.”
Alto’s three largest shareholders don’t intend to accept
The board believes the offer fails to recognise Alto’s unrealised potential and that Middle Island needs Alto, however Middle Island’s proposal offers little benefit to Alto shareholders.
Alto’s three largest shareholders, who collectively own or control 32.12% of the company’s shares, have indicated that they do not intend to accept the offer.
READ: Alto Metals to potentially fast-track into gold developer with Middle Island takeover bid
Since acquiring the Sandstone Gold Project in June 2016, Alto has compiled and reviewed a large legacy database ahead of a series of focused exploration and drilling campaigns which commenced in late-2016.
Alto’s initial goal is to delineate a JORC resource of at least 1 million ounces of gold, that can become the basis for a re-establishment of standalone oxide and primary gold mining and milling operations at Sandstone.