Ramelius Resources has sweetened its takeover offer for Explaurum by an additional 5 cents cash for each of the target’s share.
The increase is on top of a 1:4 scrip offer, which Explaurum last month claimed undervalued its Tampia gold project in Western Australia.
Ramelius’ existing 1:4 scrip offer values Explaurum at 15.25 cents per share, based on closing Ramelius share price of 41 cents on November 9.
The increased offer was built on a ‘constructive dialogue with the board of Explaurum to speed up the takeover process’.
A due diligence period has been granted for Explaurum to finalise the proposed offer; Explaurum has until December 21 to accept the offer.
Ramelius managing director Mark Zeptner said, “We are very pleased to have been able to enter into a good faith dialogue with Explaurum and their advisers, which has allowed us to reach this new point.
“We look forward to finalising our due diligence process and working with Explaurum in order to bring a binding offer to its shareholders that has the mutual recommendation of both groups.”
The Explaurum bid was first announced in September, when Ramelius revealed its plans to accelerate first cash flow from the Tampia Hill gold project 240 kilometres east of Perth.
Zeptner said there was clear logic in the combination of Explaurum’s assets with Ramelius’ Western Australia operations.
“After the successful acquisition of Edna May last year, Ramelius is focused on building its growth strategy to extend mine life and maximise the value of existing infrastructure in its portfolio,” he said.
“This compelling offer is the next step in that growth strategy and is expected to provide significant benefits to both Explaurum and Ramelius shareholders.”
Tampia is 140 kilometres from the Edna May operation.