ASIC extends Atlas deadline for Hancock takeover offer response

The Australian Securities and Investments Commission (ASIC) has granted Atlas Iron relief regarding the deadline of its target statement in response to a $390 million takeover offer from Gina Rinehart-owned Hancock Prospecting.

The deadline has now been extended by two days from Tuesday July 17 to Thursday July 19.

Atlas is consulting an independent expert to produce a report to complement its target statement. Although the Atlas board has unanimously recommended the Hancock bid in the absence of a superior offer, it has also advised shareholders to take no action until both the independent report and target statement are released.

Additionally, Atlas released its quarterly report today, shipping 2.1 million wet metric tonnes (Mwmt) in the June quarter, and shipping a maiden 85,000 tonnes (t) of lithium DSO and 45,000t of manganese, the result of separate offtake agreements made with Pilbara Minerals and Horseshoe Manganese as part of Atlas’s diversification strategy.

Atlas struck a deal with Pilbara Minerals last December for the purchase of up to 1.4Mt of raw lithium ore over 15 months, while the deal with Horseshoe made in March 2018 comprises of 100,000t of manganese over four months.

Atlas’s cash reserves as of June 30 2018 stood at $56 million, down from $64 million (plus $14 million in reserves) in first quarter 2018.

Atlas attributed this loss to neagtive operating margins on the iron ore side of the business; a $3.12 million break fee paid to Mineral Resources to free Atlas from its Scheme Implementation Deed (SID), arranged before the heated bidding in June between Fortescue and Hancock over Atlas (MinRes offered $280 million for the company in April before bowing out); $2.6 million in interest and principal payments; and increased working capital draw down from shipments late in the month.