Redstone, a subsidiary of Gina Rinehart’s Hancock Prospecting, has thrown its hat into the ring for Atlas Iron.
Atlas, a junior mining company based in Western Australia, recently caught the attention of major players in the mining scene, including Rinehart, Andrew “Twiggy” Forrest of Fortescue Metals Group (ASX:FMG) and Mineral Resources (ASX:MIN).
What lured the big-name investors to Atlas was the company’s stake in joint venture North West Infrastructure, which has development plans for two new port berths at Port Hedland.
North West Infrastructure currently has an export capacity of 13 million tonnes per year; however, the proposed two berths would bump that number up to 50 million tonnes.
Atlas agreed in April to merge with Mineral Resources in a deal set to be completed by August, but Rinehart and Forrest have both jumped on the bandwagon in the last few weeks, grabbing 19.96-percent and 19.9-percent stakes in Atlas, respectively.
The plot thickened late last week when Western Australia’s transport minister, Rita Saffioti, told Atlas that the berths it wants to develop are reserved for junior miners — that could present a problem for the company through its interested high-profile investors.
Saffioti also said the assessment would be in the hands of the Pilbara Ports Authority, leaving the project’s status undetermined.
Despite those factors, a wholly owned Hancock subsidiary called Redstone made a cash takeover bid for Atlas of AU$0.042 per share on Monday (June 18). In light of Redstone’s bid, both Fortescue and Mineral Resources issued separate statements saying they will be assessing their options.
Atlas went into a trading halt on Monday and emerged once the Redstone details had surfaced. When the halt lifted, Atlas shares jumped 22.2 percent, finally ending the day at AU$0.044 each.
It is unknown at this time what Atlas’ decision will be in regards to the Redstone bid, but in a Monday statement it acknowledges its prior agreement with Mineral Resources.
“Atlas will consider the impact of the Hancock Offer on the Scheme, including any rights of MinRes to ‘match’ the Hancock Offer, and will provide shareholders with an update in due course,” it reads.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.