Shareholders in struggling Brazil-based gold miner Beadell Resources are taking profits today after the stock shot up more than 20 per cent yesterday on a friendly takeover by Toronto’s cashed-up Great Panther Silver.

Beadell Resources (ASX:BDR) share price jumped 25 per cent to 7.1c on Monday (though Great Panther (NYSE:GPL) shareholders did not seem so enamoured with the deal – pushing the share price down.

This morning Beadell shares fell back 7 per cent as low as 6.4c as profit-takers sold down.

The deal implies 8.6c per Beadell share, which is a 51 per cent premium on Beadell’s closing share price  on September 21, 2018.

Upon completion of the transaction, existing Beadell and Great Panther shareholders are expected to own about 38 per cent and 62 per cent, respectively, of the combined company.

Beadell has unsuccessfully engaged a number of merger or takeover suitors this year – including Canadian companies Golden Harp Resources and Ring the Bell Capital.

The tie-up between Americas-based Beadell and Great Panther would include three producing mines and an advanced stage project.

The Beadell Resources (ASX:BDR) share price over the past year.
The Beadell Resources (ASX:BDR) share price over the past year.

Beadell has been working to improve the chronic underperformance of its Tucano gold mine in Brazil, where gold production for the June 2018 quarter was 23,604 ounces at all-in sustaining costs US$1,306 per ounce – about breakeven on the average gold price of $US1300 per ounce for that period.

But Great Panther – which suffered a $US2.8m loss in first half of the year on low silver prices and high production costs – wants Tucano to be its new cornerstone asset.

Great Panther chief James Bannantine called it a “transformational deal” for the shareholders of both companies.

“Great Panther brings the capital to deliver on Tucano’s substantial near  and long-term resource growth potential and to continue mine optimisation initiatives,” he said.

“The combination of assets, capital and management provides a unique opportunity to unlock a significant re-rating potential for the benefit of both existing shareholders and Beadell’s shareholders who will gain a meaningful interest in Great Panther.”