Bonterra Resources (TSXV: BTR) says it recently received an “opportunistic” non-binding letter of intent from a third party regarding an all-share acquisition of the company. This unsolicited approach, which has since expired, would value the Canadian miner at approximately C$1.60 per share.
Following review, the Bonterra board determined that the offer “significantly undervalued the company and its long-term prospects.”
Bonterra also said this offer would have required that the company to effectively cease its financing activities, which are necessary to fund its operations for the rest of the year.
Bonterra said intends to pursue a financing of up to C$10 million to fund its drilling programs at the Moroy, Gladiator and Barry projects in Quebec. This will support a resource estimate update and preliminary economic assessment (PEA), expected to be completed in the fall of 2021.
Along with 124,000 m drilled since the 2019 resource estimates on the three projects as well as the bulk sample at Moroy, the company expects the PEA will help demonstrate the value of these assets.
Shares of Bonterra Resources closed 30% higher on Wednesday at C$1.29 a share, giving it a market capitalization of C$97.6 million.