Bidding war breaks out for Tyranna’s Jumbuck gold project

A tug-of-war has erupted over Tyranna Resources’ (ASX:TYX) Jumbuck gold project in South Australia, with Alliance Resources (ASX:AGS) and Marmota (ASX:MEU) vying to acquire the asset.

Marmota is offering to pay $2.6m for the project, while Alliance is offering $2.025m, and there is also an existing $950,000 offer from Syngas (ASX:SYS) on the table.

“The Jumbuck gold project is our immediate neighbour in the Gawler Craton,” Marmota chairman Dr Colin Rose said in a statement to the ASX.

“It is our backyard. Marmota’s offer is unequivocally superior. We believe this dramatically superior offer is a truly excellent outcome for all Tyranna shareholders.”

The Marmota offer exceeds the Syngas offer by 160 per cent, and it exceeds the Alliance offer by $575,000, Marmota pointed out.

Marmota’s Aurora Tank gold discovery is 50km north of the Challenger gold mine in South Australia.

The Jumbuck project is on the western edge of the Gawler Craton and covers 7,926sqkm surrounding the Challenger gold mine, which has produced 1 million ounces at 6 grams per tonne of gold since 2002. Challenger is operated by Kingsgate Consolidated (ASX:KCN).

Tyranna Resources (ASX:TYX) share price chart

Alliance offering mostly cash

Alliance’s offer for the Jumbuck gold project of $2.025m includes $2m cash, and it has invited Tyranna shareholders to subscribe to a rights issue in the company valued up to $1m in proportion to their shareholding in Tyranna at a ‘significant discount’.

The Jumbuck gold project has an inferred resource of 219,000oz (0.5g/t cut-off).

Alliance’s flagship project is Wilcherry in the southern part of the Gawler Craton, about 45km north of Kimba in South Australia.

The Weednanna gold deposit, part of the Wilcherry project, has a maiden resource of 1 million tonnes grading 5.1g/t gold for 181,000oz.

Tyranna’s response

Tyranna said in a statement that if Alliance’s offer was to be accepted, it would be subject to some conditions such as Tyranna’s shareholders approving the sale.

The company has a market value of $6.7m and recently has been focused on its Dragon and Knight nickel projects in WA.

Tyranna has sought legal advice on the rival offers and said it is not in a position to consider alternative offers for the Jumbuck project because it has a binding sale agreement with Syngas.

Tyranna agreed in April to sell its interest in the Jumbuck project for $950,000 to Syngas, then in May, Marmota made a $1.3m offer to buy the project.

Syngas has applied to the ASX to delist from the exchange citing a lack of trading in its shares.

Syngas had interests in the Northern St Vincent Basin coalfield northwest of Adelaide.