Ramelius Resources is set to acquire the Penny West gold asset in Western Australia’s Mid West region via a friendly takeover of Spectrum Metals.
Ramelius plans to acquire all shares in Spectrum that it does not already own.
The company already holds a 4.9 per cent relevant interest of issues and ordinary shares in Spectrum.
Spectrum directors unanimously recommended shareholders to accept the offer, as did Ramelius managing director Mark Zeptner.
“There is clear logic in the combination of Spectrum’s assets with Ramelius’ Western Australian operations,” Zeptner said.
“This compelling offer is the next step in that growth strategy and is expected to provide significant benefits to both Spectrum and Ramelius shareholders.”
Spectrum chairman Alex Hewlett agreed that Ramelius would help the company unlock Penny West’s full value.
“The Penny West gold system is developing into one of significant value,” Hewlett said.
“The combination of Penny West with the existing assets of Ramelius will build a gold business capable of delivering exceptional future returns for our shareholders.”
Spectrum shareholders will receive one Ramelius share for every 10 Spectrum shares held, which are valued at $0.15 each.
The Penny West gold project is one of Western Australia’s highest-grade, undeveloped gold assets, located 150 kilometres south-east of Ramelius’ existing Mount Magnet mining and processing operations.
It boasts a gold resource of 799,000 tonnes at 13.8 grams of gold per tonne for 355,500 ounces.