Ecstall backs sweeter offer for Mantle

Vancouver — Ecstall Mining (EAM-V, ESMGF-O) is urging its shareholders to back a $22-million takeover bid from Mantle Resources (MTS-V, MTSZF-O), a move that should kickstart drilling on the Akie lead-zinc property in northeastern British Columbia.

Ecstall is backing the bid after Mantle agreed to sweeten its all-stock offer for the company. Under a support agreement that was reached on Jan. 29 — the day the previous offer was set to expire — Mantle is upping the offer to 0.41 of a Mantle share for each share of Ecstall, up from 0.4 of a Mantle share.

If the latest Mantle bid succeeds, Ecstall intends to transfer, at its book value, certain non-core gold exploration properties to a new company to be formed by Ecstall CEO Chris Graf, and held in trust for the benefit of the Ecstall shareholders.

Vancouver-based Mantle has also agreed to extend the expiry date for its bid until midnight on Feb. 9.

“We are pleased with the way events have unfolded,” said Mantle CEO Peeyush Varshney.

He said the aim of the takeover bid is to consolidate the interests of both companies in 22 contiguous claims, located 280 km north of Mackenzie, B.C. They are known as the Akie property.

Mantle has turned in a number of significant high-grade intersections at Akie since drilling began in late 2005.

In 1995, Inmet Mining (IMN-T, IEMMF-O) calculated a non-National Instrument 43-101-compliant inferred resource (based on four widely spaced holes) of 13 million tonnes, grading 8.5% zinc, 1.5% lead, and 13.2 grams silver per tonne over an average true thickness of 6.3 metres.

Varshney wants to launch an aggressive exploration program that is expected to cost between $5 and $7 million, and involve two or three drill rigs.

“If the weather co-operates we could be drilling sometime in late May,” he said.

Ecstall’s board had described Mantle’s initial bid as “inadequate from a financial point of view.”

However, following an approach in late January from Ecstall and its financial adviser Westwind Partners, Mantle agreed to revise the offer because Varshney wanted to do a friendly deal, he said.

Under the support agreement, Graf and Ecstall director Clifford Frame have agreed to tender their shares to the Mantle offer.

Based on the number of shares that were tendered to the initial bid, Varshney predicted that the new offer would be successful.

Reaction to the revised bid sent Mantle shares up 1 to $1.10 on the TSX Venture Exchange on Jan. 30, while Ecstall rose 3 to 43.