Shareholders at the company's annual general meeting today heard the offer from China's Guangdong Rising Assets Management was below the level at which the board would be prepared to recommend a takeover to its shareholders.
PanAust said the board had since agreed to allow GRAM to undertake due diligence to assist it in improving its offer but warned the same level of access would be extended to other bidders.
"On April 10, the board of PanAust received a confidential, non-binding, indicative and incomplete proposal from GRAM to acquire all of the shares in the company by way of an off-market takeover offer," chairman Garry Hounsell told the meeting.
"GRAM became a cornerstone shareholder of PanAust in September 2009 by way of a placement and currently holds approximately 23% of PanAust's issued capital.
"The initial indicative price of $A2.20 per share was subsequently raised to $2.30 but GRAM has
been advised by the PanAust board that this price is below the level at which the board would be
prepared to recommend a takeover offer to shareholders.
"The board has agreed to allow GRAM to undertake due diligence, under a confidentiality
agreement, to assist GRAM to improve its offer.
"The board will also seek alternative proposals and similar access to what has been afforded GRAM will be offered to other potential bidders.
"Please note that at this stage the company has not received a formal takeover offer from GRAM, or any other potential bidder, that is capable of acceptance by the company's shareholders and there is no certainty that one will eventuate."
The meeting also heard an update about the company's agreement with Glencore to purchase an 80% interest in the Frieda River copper-gold project in Papua New Guinea.
"This represents a great opportunity for the company and, while the purchase remains subject to a
condition precedent, we expect the transaction will close during the September quarter," Hounsell said.
"Frieda River is one of the largest undeveloped copper-gold deposits in the world and together with our Inca de Oro project in Chile, will provide PanAust with significant resources and development optionality into the foreseeable future.
"PanAust's commitment to sustainable development is a key consideration in the way the company
plans and undertakes its business activities and incorporates a strong emphasis on delivering
sustainable benefits to the communities within the vicinity of its operations and along logistics and concentrate haulage transport routes."
Meanwhile, gold continued to fall and even nickel took a hit overnight.
Comex gold futures for August delivery dropped to $1256.30 an ounce, the lowest price since early February.
The Australian dollar last traded at 93.04c, equating to a local gold spot price of $A1350.40/oz.
In London, metals were mixed, with tin and aluminium still managing gains.
But nickel had a tough session, dropping almost 2.2% to $US18,873/t, well down from its high of nearly $21,000/t only two weeks ago.
Copper lost 1% to $6973/t.
Singapore Tapis crude closed at $US115.56 a barrel overnight, compared to $116.16 at the end of last week.