Middle Island initially offered five shares for every Alto share held, but when that failed to gain traction or Alto's backing, it upped it last week to six shares for every Alto share held.

Alto said the offer valued it at A2.4c per share, which is a 27% discount to Alto's Thursday closing price and a 33% discount to the price of a shortfall placement completed in May.

The company said Middle Island held just 1.5% of Alto as of June 21.

Alto also told shareholders it had made positive progress since the takeover was first announced, raising $2.6 million, starting a 10,000m drilling program and securing a Western Australian government drilling grant.

Directors recommended shareholders reject the offer and Alto's three largest shareholders, with a combined 32.1%, do not plan to accept it.

Middle Island owns the 600,000 tonne per annum Sandstone mill.

Alto owns around 818sq.km of the Sandstone Goldfield, and it wants to increase resources from 300,000 ounces to 1Moz and develop its own standalone mill.

"Your directors are disappointed with the time and resources being allocated to the offer by Middle Island given the significant lack of traction and continue to recommend that you take no action in relation to the offer and continue to ignore all correspondence you receive from Middle Island," Alto said.

Alto shares closed unchanged at 3.3c, while Middle Island jumped 50% to 0.6c.