Territory Resources Ltd is waiting to see how takeover target Olympia Resources Ltd addresses its funding issues before deciding how to move to full ownership of the mineral sands miner.
The iron ore producer may turn its attention to acquiring mineral sands miner Matilda Minerals Ltd, Territory chairman Michael Kiernan told AAP.
Territory's on-market $15.53 million takeover bid for Olympia expired on Saturday, falling well short of the 90 per cent benchmark set for the bid, which it needed to proceed to compulsorily acquire the remainder of Olympia's shares.
Territory has amassed a 64.76 per cent stake in its target despite Olympia's board having rejected the offer.
Olympia shares were steady at 10 cents at 1309 AEST, the same price as the offer.
Mr Kiernan said he was in no rush to make his next move on Olympia, which could involve another offer, or raising Territory's stake under the `creep' provisions of the Takeovers Code, adding three per cent each six months.
"This is the first part of a four act play," Mr Kiernan said.
"I'm in no hurry: I'm happy to sit there for the next six to 12 months.
"When we made our bid, we said that we would not increase it and not extend it.
"Having just a tad under 65 per cent, I'm quite surprised that so many (accepted the offer) when you consider that the board strongly rejected our offer, saying we were opportunistic in getting assets at significantly less than what they put the value on, at 21-25 cents per share.
"We started at 20 per cent and ended up with 65 per cent, which is a strong rebuff for the (Olympia) board.
"My strategy was to let the bid close and let the market establish the true value for Olympia, which it is doing, and is now bid at 6.2 cents."
He said there was no doubt Olympia would need to conduct a rights issue "and it will be interesting to see at what price they pitch that at".
Olympia spent about $2 million during the half year to December 31 2007, finishing the year with $507,224 in the bank.
It is scheduled to repay $2 million to Territory by mid-June.
Mr Kiernan flagged his intention to acquire Matilda and Olympia late last year, with the goal of ultimately building up Territory to produce about 250,000 tonnes of mineral sands concentrate.
He believes there will be very strong future demand for zircon, which is used to glaze tiles, driven by the growth of China.
"I'm buying straw hats in winter," he said.
Territory has acquired a 34.58 per cent stake in Matilda, which is currently in a trading halt but last traded at 39 cents.
Shares in Territory were 1.5 cents lower at 90.5 cents at 1309 AEST Monday.
TTY Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
