South Australia-based minnow Flinders Mines will go back to the...

South Australia-based minnow Flinders Mines will go back to the drawing board after shareholders voted overwhelmingly against accepting a recommended deal with New Zealand conglomerate Todd Corporation.
Flinders had asked shareholders to approve a deal that would have seen Todd pay Flinders $10 million for an option to buy its Pilbara iron ore project.
Under the option, Todd would have had the right to pay another $55m-plus in royalties to take outright control.
While the offer was unanimously recommended by Flinders’ directors and was described as “fair and reasonable” by an independent expert commissioned to study the deal, the offer received little support among Flinders shareholders.
About 80 per cent of votes lodged were against the transaction.
Flinders chairman Robert Kennedy said the company would turn its attention to other options for the project, but acknowledged there had been no “serious” interest in Flinders and its project from any other parties.
“I’m delighted we brought something to shareholders,” Mr Kennedy said.
“But it was their vote, they voted overwhelmingly against it, we live in a democracy, and whatever is their answer is their answer and there’s nothing we can do.
“We have to go about the business of seeing whether we can find something or someone else.”
Todd had been planning to incorporate Flinders’ Pilbara project into a broader Pilbara iron ore network it hopes to develop on the back of assets acquired through its recent acquisition of Rutila Resources.
Dissident shareholders in Flinders had been pushing for Todd to make a full takeover offer for Flinders, as with its offer for Rutila, instead of the option agreement.
Todd, which owns just under 20 per cent of Flinders, had been funding a feasibility study over Flinders’ project while the deal was being considered.
That funding will now stop, and Mr Kennedy said Flinders had no intention of continuing with the study at this point.
“We won’t be pursuing the feasibility study because it’s not feasible for Flinders to produce iron ore because we can’t raise $1 billion to turn what we have into production,” he said.
“We still need a path to market, and for Todd to make their path to market work is another $3bn. In the current market, that’s not acceptable.”
Waiting for iron ore prices to recover was not an option given Flinders has sufficient funds to last until the end of next year.
“We won’t be sitting there waiting for someone else to come along, we’ll start looking at other alternatives, but all of that is at an embryonic state,” he said.
Privately owned Todd is one of New Zealand’s biggest companies, with interests including oil and gas, electricity, property development and healthcare.
Shares in Flinders closed unchanged at 1.2c yesterday.