The S&P/ASX 200 Materials Index (ASX: XMJ) is climbing 1.27% in early afternoon trade, but one ASX copper share is soaring far higher.
The Demetallica Ltd (ASX: DRM) share price is currently up 40% at 28 cents a share after hitting an intraday high of 29.5 cents apiece — a jump of almost 48%.
Let’s take a look at why this ASX copper share is on the move today.
Takeover offer
Demetallica shares are taking off on Monday after the company received an off-market takeover offer from AIC Mines Limited (ASX: A1M).
Under the deal, Demetallica shareholders will be offered one AIC Mines share for every 1.5 Demetallica shares. The offer values Dematallica at about $36 million or 33.7 cents per share. This is a 68.5% upside on the company’s last closing price of 20 cents a share.
Demetallica listed on the ASX on 26 May this year after completing an initial public offering (IPO) of 60 million shares. The company’s major project is the Chimera Polymetal Project. This hosts the Jericho, Sandy Creek, and Altia deposits.
The Jericho deposit is adjacent to AIC Mines’ Eloise copper mine. AIC forecasts it will produce about 12,500 tonnes of copper and 6,000 ounces of gold concentrate in FY23. However, this production could increase by 60% should the merger go ahead.
Commenting on the proposed deal, AIC managing director Aaron Colleran said:
Combining AIC Mines and Demetallica is a logical consolidation. The tenement holdings of the two companies adjoin. The Eloise processing facility is only 4 kilometres from Demetallicaâs Jericho deposit.
Combining these assets will provide the quickest and most efficient means of developing and mining the Jericho deposit â to the shared benefit of both AIC Mines and Demetallica shareholders.
The deal is conditional on AIC Mines obtaining an interest in at least 50.1% of Dematallica shares and other market conditions being met.
Share price snapshot
The Demetallica share price has risen 10% year to date, adding 22% in the past month.
For perspective, the ASX 200 Materials Index has lost nearly 7% in 2022 so far.
The ASX copper share has a market capitalisation of about $24 million based on its current share price.
The post Guess which ASX copper share is rocketing 48% on Monday appeared first on The Motley Fool Australia.
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Motley Fool contributor Monica O’Shea has no position 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 Scott Phillips.
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