Central Asia Metals in bidding war for New World Resources

Investing.com -- Central Asia Metals (LON:CAML) faces a deadline of July 17 to match or exceed Kinterra Capital’s latest conditional offer of A$0.064 per share for New World Resources (ASX:NWR).

The bidding war for the copper developer continues with both CAML and Toronto-based private equity fund Kinterra yet to declare their final offers.

Kinterra’s offer price will increase to A$0.064 per share if it receives sufficient acceptances to exceed a 30% stake, up from its current approximately 19% holding.

CAML currently holds about 12% of NWR.

According to RBC, the acquisition would be transformative for CAML, potentially doubling its copper equivalent production to approximately 50,000 tonnes per annum from about 23,000 tonnes once in full production. This could increase CAML’s EBITDA to twice current levels by 2030.

At Kinterra’s latest conditional offer price, RBC calculates the transaction remains accretive across key metrics with an implied price-to-net asset value multiple of 0.38x.

This is below the average of precedent copper developer transactions at 0.8x and CAML’s spot valuation of 0.9x.

NWR currently trades at A$0.065 per share, representing a 3% premium to Kinterra’s current A$0.063 offer.

RBC estimates CAML’s total potential financial capacity at $440 million, which is approximately 3% below Kinterra’s offer and the valuation implied by NWR’s current share price and project capital expenditure.

RBC has maintained an Outperform rating on CAML but reduced its price target to 190p from 200p following the company’s second-quarter production results.

The revision reflects downgrades to fiscal year 2025 zinc and lead production guidance at CAML’s Sasa mine, where orebody variability has resulted in lower than expected grades.

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