A consortium of offshore investors, led by Crosby, has offered 64c per share, which it said represented a 32% premium to today’s closing price of 48.5c and a 35% premium to the volume average weighted price of 47.5c over the past 12 months.

Crosby managing director Shahzad Ashfaq told MiningNews.net the identity of the consortium members would be outlined in the bidders statement to be released to the market within six weeks.

Ashfaq also revealed Crosby had recently met with Tethyan representatives including managing director David Moore but declined to comment on whether Tethyan knew of the bid prior to today.

“We have had very preliminary conversations with them. We have met with David Moore before and shared some of our thoughts with him but … there was no formal proposal given,” Ashfaq said.

He said Crosby had not spoken with any of Tethyan’s major shareholders which include JP Morgan Nominees (21.92%), Westpac Custodian Nominess (15.9%) and National Nominees (5.56%).

In launching its bid, Crosby focused on the development risks for a company the size of Tethyan in attempting to develop a project the size of Reko Diq in an area like Pakistan, citing possible hostilities and terrorist activity as serious threats to Tethyan’s operations in an attempt to sway shareholders to offload their shares.

Tethyan is nearing completion of a bankable feasibility study at its H4 starter project, considering a 12 year, 42,000 tonne per annum copper operation.

Tethyan intended to develop H4 as a starter project for the massive Reko Diq project which has a resource of 943 million tonnes grading 0.64% copper and 0.3 grams per tonne of gold for a contained 6Mt of copper and 9M ounces of gold.

Tethyan had previously flagged a capital cost in excess of $1 billion to develop the rest of the project, the larger Western Porphyries deposit, for production of 200,000-300,000tpa of copper over a 50 year mine life.

“Project financing in the resources sector has traditionally been challenging in the geographic region where Tethyan’s projects are located, and bank borrowings often require significant parent or multilateral agency support before they can be completed," Crosby said in a release to the ASX Tuesday afternoon.

"Tethyan is not in a position to offer such security."

Crosby also voiced concerns over Tethyan's ability to develop H4 on time, on budget and at the planned production level, and highlighted the dependent relationship between the world copper price, currently trading at 10-year highs, and the ability of the junior to secure finance for H4 following completion of the BFS.

“The development risks for the project are exacerbated by its future funding requirements, which even on the H4 starter project alone, would require an amount that is multiple of the current market capitalisation of the company,” Crosby said.

Ashfaq indicated this was where the strength of Crosby lay, in its ability to finance the larger project. He said if successful the consortium would immediately turn its focus to development of the H4 project.

“We do believe we can add value, particularly on the financing side which is a tall order in terms of the amount of capital required to bring various projects within Tethyan into production and that is an area where we believe we are well qualified to raise capital,” Ashfaq said.

“We will keep our options open in terms of how we develop and what we do with the assets, but the plan is to try and develop and raise capital.”

BHP Billiton has a clawback right over 70% of Tethyan’s 70% stake in the project and Ashfaq said this could deter possible counter bidders.

Tethyan shares hit a 52-week high of 70c just over two months ago before slumping to a close of 48.5c yesterday. The company’s share price has not closed below 40c since September last year when it hit 37c.

“The bid allows Tethyan shareholders to effectively transfer such risks to the Crosby Group and realise a substantial premium in cash for their investment,” Crosby said.

The conditions of the offer include a 90% minimum acceptance with no regulatory approvals required.

Tethyan currently has more than 131 million shares on offer and a market cap of $63.7 million.

Crosby was last year involved in the $US460 million takeover of Australian upstream oil and gas company Novus Petroleoum. The takeover bid resulted in the Crosby Group obtaining significant equity interests in the Middle East, Pakistan and US assets of Novus.