News, Takeover bids, Westgold Resources

Westgold launches takeover bid for Musgrave

Westgold, cue, offer, musgrave, minerals

Westgold Resources has made an unsolicited takeover bid for Musgrave Minerals.

Under the terms of the offer, Musgrave shareholders would receive one fully-paid Westgold ordinary share for every 5.37 Musgrave shares held at a price of $0.30 a share.

The offer consideration implied an equity value for Musgrave at $177.3 million.

“Westgold’s view is that Musgrave’s plan to construct a new, small processing plant within close trucking distance of two established larger processing plants is ambitious,” Westgold managing director Wayne Bramwell said.

“Westgold is an established, well-funded owner and operator of two processing hubs in the Murchison region. The combination of Musgrave’s assets with our regional infrastructure and operating teams will fast track and de-risk the development of Musgrave’s Cue Gold Project and provides Musgrave shareholders immediate exposure to a much larger, established Western Australian gold producer.

“The Westgold offer provides a logical, capital efficient and fast track solution that delivers immediate value to both Musgrave and Westgold shareholders and can rapidly enhance production scale and profitability of the combined group.”

However, Musgrave has recommended that its shareholders take no action on the bid.

“At this stage the company has not received Westgold’s bidder’s statement and the board is not yet in a position to make a formal recommendation to shareholders,” Musgrave said in a statement.

“Upon receipt of the bidder’s statement, the board of directors will carefully consider the offer and make a recommendation to shareholders in Musgrave’s target’s statement, which will be provided in ample time for shareholders to make an informed decision prior to the close of the offer.”

Musgrave’s Cue gold project in Western Australia has seen some favourable results of late, with Musgrave managing director Rob Waugh saying this was another set of strong, consistent metallurgical results which show there is a general uniformity and consistency with the recoveries across all the gold deposits at Cue.

“The very high total gold recovery and high gravity-only component recovery  ensures that conventional processing options can be applied in any development scenario moving forward,” he said.

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