Allied Gold yesterday announced it is embarking on a friendly $60 million off-market takeover of Toronto-listed Australian Solomons Gold (ASG).
According to Allied executive chairman Mark Caruso, the new combined company will allow all shareholders to benefit.
“A combination of these two organisations will deliver significant value to both sets of shareholders,” he said.
The new company will be aiming towards an annual production target of more than 300,000 ounces by 2012-13 from their projects in Papua New Guinea and the Solomon Islands, Caruso said.
Under the terms of the offer, ASG shares have been valued at C$0.403 based on the closing price of Allied Gold shares on 16 September which, according to Allied, represents a 9% premium to ASG shares.
Perth-based Allied owns the Simberi gold mine in Papua New Guinea, which produced 73,000 ounces of gold in 2008-09 and is targeting at least 200,000 ounces a year by 2013, while ASG is working towards reopening the closed Gold Ridge mine in the Solomon Islands in the first quarter of 2011.
“The offer represents an opportunity for ASG shareholders to be exposed to a larger company with a producing gold mine while retaining material exposure to the Gold Ridge project,” ASG chairman, Stephen Everett.