Inca Minerals Nears Stunalara Acquisition with 73.5% Control

Inca Minerals Limited (ASX: ICG) has made significant progress in its takeover bid for Stunalara Metals, securing 73.5% of voting power through acceptances totaling 33,488,979 shares. This milestone puts Inca on a clear path toward its goal of obtaining a 90% ownership threshold required to complete the acquisition.

The recommended off-market takeover bid, originally announced on February 5, 2025, and formalised in the Bidder's Statement dated February 25, 2025, has gained substantial traction among Stunalara shareholders. Further strengthening Inca's position, Mr. Andrew Haythorpe, who holds approximately 18.7% of Stunalara shares (undiluted basis), has confirmed his intention to accept the offer, subject to no superior proposals emerging and the Independent Expert maintaining their favourable conclusion.

The Strategic Value of Securing Majority Control

Reaching the 73.5% acceptance threshold represents a critical inflection point for Inca Minerals. With nearly three-quarters of Stunalara's voting power secured, Inca has effectively established majority control, giving it significant influence over Stunalara's operations and strategic direction even before the acquisition is finalised.

This level of acceptance typically signals strong shareholder confidence in the merger's potential value. For Inca investors, this development suggests the company is on track to fully integrate Stunalara's assets into its portfolio, potentially creating operational synergies and expanding its resource base.

Inca Minerals has been making waves in the exploration sector, with high-grade gold and antimony prospects at their Hurricane Project demonstrating the company's ability to identify valuable mineral deposits. This acquisition aligns with their strategy of portfolio expansion and resource diversification.

Understanding Takeover Conditions and Thresholds

What is a 90% Acceptance Threshold?

The 90% acceptance threshold is a critical concept in Australian takeover law. When a bidding company acquires 90% of the target company's shares, it triggers compulsory acquisition rights, allowing the bidder to purchase the remaining shares even from shareholders who didn't accept the offer.

This threshold matters to investors because:

1. It provides certainty of outcome – once reached, the acquisition will definitely complete
2. It eliminates the complexities of managing a company with minority shareholders
3. It allows the acquiring company to fully integrate operations and realise all potential synergies

For Inca shareholders, reaching this 90% threshold would mean the company can move forward with complete ownership and control of Stunalara's assets, potentially maximising the acquisition's value.

The Mechanics of Compulsory Acquisition

Under Section 661A of the Corporations Act 2001, once a bidder reaches the 90% threshold, they can proceed with compulsory acquisition of the remaining shares. This process includes:

1. Lodging a compulsory acquisition notice with ASIC
2. Sending the notice to the target company and all remaining shareholders
3. Providing a six-week notice period during which shareholders may object
4. Completing the acquisition by paying consideration to remaining shareholders

This mechanism ensures that takeovers can be completed efficiently once a substantial majority of shareholders have accepted the offer. It prevents small minorities from potentially blocking full integration of the two companies, which could diminish the value of the transaction for the majority of shareholders.

Current Position of Inca's Takeover Bid

With 73.5% of shares already secured and Mr. Haythorpe's indicated 18.7% support, Inca appears well-positioned to exceed the 90% threshold required for compulsory acquisition. The combined potential acceptance of over 92% would surpass the minimum requirement, suggesting the acquisition is likely to proceed to completion.

For investors interested in junior mining investments, this takeover represents a textbook example of the consolidation often seen in the mineral exploration sector.

Takeover Timeline and Next Steps

Inca Minerals has established a clear timeline for completing the acquisition:

With the offer set to close on April 4, 2025 (barring extensions), Inca has approximately two weeks to secure the remaining acceptances needed to reach the 90% threshold. The company will likely focus on engaging with remaining shareholders to encourage participation in the offer.

Should the 90% threshold not be reached by the closing date, Inca has several options:

1. Extend the offer period to allow additional time for acceptances
2. Operate Stunalara as a majority-owned subsidiary if sufficient control is deemed acceptable
3. Consider alternative structures or arrangements to achieve full operational integration

Investment Implications of the Stunalara Acquisition

This acquisition represents a significant expansion move for Inca Minerals. While specific details about Stunalara's assets weren't provided in the announcement, the persistence with which Inca has pursued this takeover suggests the target company possesses resources or operational capabilities that complement Inca's existing portfolio.

For investors evaluating Inca Minerals, this acquisition potentially offers:

1. Expanded resource base and project pipeline
2. Potential operational synergies and cost efficiencies
3. Increased market presence and potentially improved liquidity
4. Growth trajectory that could enhance shareholder value

The high acceptance rate (73.5%) combined with Mr. Haythorpe's indicated support (18.7%) would bring total potential acceptance to over 92%, exceeding the required threshold for compulsory acquisition.

The success of this acquisition will heavily depend on the quality of executive leadership. Mining CEO excellence is particularly critical during periods of corporate integration when management must balance operational continuity with strategic change.

Corporate Actions in the Mining Sector

Mergers and acquisitions play a significant role in the mining industry's development cycle. They allow companies to:

• Consolidate fragmented resource holdings to achieve economies of scale
• Access complementary assets or capabilities
• Accelerate development timelines through combined expertise and capital
• Diversify project portfolios to manage risk across different commodities or jurisdictions

The mining sector frequently sees consolidation during different phases of the commodity cycle. During downturns, well-capitalised companies often acquire distressed assets at favourable valuations. During upswings, companies may acquire development-stage projects to build production capacity and capture rising commodity prices.

For shareholders of both acquiring and target companies, these transactions can create significant value when executed effectively. However, they also carry integration risks and potential challenges in realising projected synergies.

Understanding the global commodities market provides essential context for evaluating mergers like this one, as broader market trends often drive consolidation activity.

Why Investors Should Monitor Inca Minerals

Inca Minerals stands at a pivotal moment with this acquisition approaching completion. The company has demonstrated its ability to execute on strategic growth initiatives, securing broad shareholder support for its vision.

Key reasons to follow Inca's developments include:

• Imminent acquisition completion: With the offer closing date approaching and acceptance levels already substantial, the company appears positioned to successfully complete this strategic transaction.

• Post-merger integration potential: Following the acquisition, investors should watch for announcements regarding operational integration and development plans for Stunalara's assets.

• Resource expansion opportunities: The combined entity will likely have an enhanced project portfolio, potentially accelerating development timelines or expanding exploration activities.

• Catalysts for revaluation: Successful completion of the takeover could trigger market revaluation of Inca shares as the company's growth profile and asset base expand.

As the April 4 closing date approaches, investors should monitor for any updates regarding additional acceptances, potential offer extensions, or strategic plans for the combined entity following completion of the transaction.

Companies like Inca must overcome numerous challenges in the junior mining space to succeed. Navigating junior mining challenges requires careful strategic planning, sufficient capitalisation, and effective stakeholder management – all traits that successful consolidators in this sector typically demonstrate.

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