Danakali (ASX: DNK) warned shareholders on Friday of “predatory activity” by unidentified groups currently approaching investors with offers for their stakes in the company as little as A$0.01 per share.

The company, which last year sold its 50% stake in the Colluli potash project in Eritrea to Chinese buyers for $121 million (A$154.7 million), returned nearly 90% of the proceeds to shareholders mid-January.

Danakali has now cash reserves of about A$38 million, or about A$0.11 a share. This means shareholders are being offered less than 10% of the underlying value of their shares, it said.

The Australian miner noted in a separate statement it was already exploring a range of new liquidity options for shareholders. These include an off-market share buyback and further distribution of the firm’s cash reserves in the form of a capital return.

The alternatives are part of Danakali’s efforts to get its shares re-listed on the Australian Stock Exchange. its latest proposal to resume trading was rejected, leaving shareholders in a difficult position.

“We believe the extended suspension of our shares puts our shareholders in a difficult position and we will now explore other options to achieve additional liquidity while continuing to engage with the ASX,” executive chairman Seamus Cornelius said.

The Perth-based miner said it had taken the first steps to pursuing a new project in Eritrea by applying to an exploration licence covering 1,537 km². Preliminary work at the property shows the area may be prospective for copper and gold, it said.

Danakali noted it would report back to shareholders on the outcome of the board’s work and and talks in coming weeks.

Source: MINING.COM – Read More