Northern Star Resources has taken a step to speed up its acquisition of Echo Resources as it waived all the remaining conditions that could hold up the offer.
Perth-based Northern Star has declared the offer unconditional, urging Echo shareholders to accept its offer in the absence of a superior proposal.
Northern Star is already Echo’s largest shareholder with more than 21 per cent of the company.
The gold miner suggested Echo shareholders would avoid future funding requirements with respect its Yandal project in Western Australia and associated dilution risks by accepting the offer.
“The likelihood of a counterbidder emerging with a superior proposal is considered low, having regard to Northern Star’s existing 21.99 per cent interest in Echo,” Northern Star stated.
“If Echo shareholders do not accept the offer, they will be exposed to a variety of other risks including a risk that the Echo share price may fall after the offer closes.”
Northern Star is also providing accelerated payment terms, such that Echo shareholders will be paid within seven business days after Northern Star receives a valid acceptance of the offer.
Echo shareholders intending to accept the offer should do so immediately “as there is no reason to delay,” Northern Star stated. The offer stands until October 14.
Northern Star is offering a 50 per cent premium on Echo’s 20-day volume weighted average price (VWAP), amounting to 33 cents for each remaining share Northern Star doesn’t own.
Echo’s key asset is its Yandal gold project, which comprises over 1600 square kilometres of contiguous tenements in the Yandal greenstone belt in Western Australia.
The Yandal belt also hosts Northern Star’s Jundee project. With the proposed transaction, Northern Star is able to consolidate its mineralisation for further exploration and development.
Echo’s Yandal project has existing mineral resources of 1.7 million ounces and ore reserves of 815,000 ounces.