Gujarat offered one of its shares for every five Rey shares two weeks ago, valuing Rey at 9c per share.

While a considerable premium to the 5c territory Rey occupied for most of last month, the current share price has dropped 0.2c to 8.8c this morning, with the junior coming out of a trading halt placed on Monday.

Rey managing director Kevin Wilson said Gujarat’s offer undervalued Rey and its prospects.

“The timing of the Gujarat offer is opportunistic and conditions attached to the offer are extraordinarily broad and means, in effect, that Gujarat has taken an option over pursuing its offer to a conclusion,” Wilson said.

He added the company board and associates held 20% of Rey’s issued shares, blocking any chance the Gujarat offer could reach the 90% it needs.

Rey has also recommended its shareholders do not act on any correspondence from Gujarat.

In the days before Gujarat’s offer, Rey upgraded the JORC-compliant resources at its wholly owned Duchess-Paradise project in Western Australia’s Canning Basin to an indicated resource of 144 million tonnes of thermal coal. The company’s total resources are 511Mt.

On the day of the offer, Gujarat chairman Arun Jagatramka resigned from his Rey director position.

Meanwhile, Rey has announced an underwritten one-for-five non-renounceable rights issue to raise $2.75 million through the issue of 30.61 million shares at 9c per share.

Rey also holds several prospective copper and gold exploration projects in Chile and Peru.