Myanmar Metals will exit that country due to the deteriorating governance problems and use cash from the sale of the famous Bawdwin mine to make a fresh start, including a name change and share consolidation.

It is urging shareholders to accept a lower, but less risky take-over offer.

Executive chairman and chief executive John Lamb said the company was disappointed what has happened since a military coup earlier this year, saying he believed the company could have used Australian know-how on “a great mineral deposit” to the benefit of everyone. Instead, the company will now look for another project with base, battery, and precious metals. He has put forward a name change to Mallee Metals.

The company has decided to sell the Bawdwin mine because “the board sees no prospect of there being an operating environment in Myanmar conducive to an ASX-listed company seeking to procure project finance in the short to medium term”, Mr Lamb wrote in a letter to shareholders today.

The company also would not simply hold on to the mine and hope for a return of stable government because the holding costs could diminish its cash reserves.

“Myanmar Metals has run a structured and expedited sales process to seek offers from potential acquirers with business in or close to Myanmar,” Mr Lamb wrote. Recently, it received a conditional, non-binding $55 million offer from Chinese mining giant Yintai Gold for its 51 per cent stake in Bawdwin.

This represents an offer of 3.5¢ per share, half of the 7¢ shares were trading at before being halted on 1 February. However, Yintai has not completed it due diligence, visited the site, or contacted other mine owners.

Myanmar Metals has also received a $40.8 million offer from its joint venture partner WMM, which requires less regulatory approval, but is only 2.1¢ per share.

The board is urging shareholders to accept the lower offer because it is less risky.

“WMM’s offer provides shareholders with certainty and a timely exit from Myanmar and, perhaps to labour a point already made, taking the shortest path to the completion of a transaction reduces exposure to further adverse events,” Mr Lamb noted.

The share consolidation would likely see a 10-for-1 consolidation. Shareholders will vote on all these issues at the annual general meeting on 24 September.

Myanmar Metals largest shareholders are Perilya Ltd with16.8 per cent. Perilya is owned by China’s third largest zinc producer, Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. Explorer Mark Creasy’s Yandal Investments is the second-largest shareholder with 10.7 per cent.