Ramelius Resources has launched a takeover process for gold explorer Explaurum Limited with the distribution of a bidder’s statement.
The Perth-based gold miner first announced its takeover offer of one Ramelius share for every four Explaurum shares in a September 10 statement.
Ramelius made a scrip offer to the tune of $59.2 million at 12.3 cents per share, a 66.2 per cent premium on Explaurum’s last closing price (September 7) of 7.4 cents.
It is particularly interested in Explaurum’s Tampia Hill gold project near Narembeen, around 240km east of Perth.
Explaurum owns 90 per cent of Tampia Hill and completed a feasibility study for the project in May.
The site hosts an initial probable ore reserve of 7.2Mt at a 2.09g/t gold grading for 485,000oz overall. The feasibility study also revealed a total mineral resource of 675,000oz from 11.7Mt at 1.79g/t.
Explaurum is scheduled to complete a bankable feasibility study (BFS) for Tampia Hill in October.
The takeover offer is in keeping with a period of expansion at Ramelius. Last October the company purchased the Edna May gold mine from Evolution Mining (on course for an early 2019 start).
Ramelius also signed an agreement to acquire the Marda Gold project north of Southern Cross from Black Oak Minerals for $13 million on September 13, three days after the Explaurum announcement.
“As owners and operators of the Edna May gold mine near Westonia, WA, Ramelius was aware of Explaurum’s Tampia Hill Project and the merits in investigating joint approaches to mining resources in the area to maximise returns and avoid expensive duplication of infrastructure,” Ramelius independent non-executive chairman Kevin Lines said in the company’s bidder’s statement.
“Following a review process post Explaurum’s announcement of the results from their Tampia feasibility study, Ramelius formed an opinion that given the capital cost burden of this project and the reduction in the net present value since the previous scoping study, a merger of the two companies would provide mutual benefits to shareholders in both companies.”