Explaurum wants to ‘set the record straight’ on suitor’s finger-pointing
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Junior takeover target Explaurum has come out swinging at taunts by gold miner Ramelius Resources over its rejection of the suitor’s $59 million hostile all-scrip offer.
Explaurum (ASX:EXU) said in a statement published to the ASX that it would address “some of the false, selective and unrepresentative claims made by Ramelius”.
Ramelius (ASX:RMS) says it engaged in initial talks with Explaurum on June 14, following the release in May of a feasibility study focused on Explaurum’s flagship Tampia gold project 240km east of Perth.
The Tampia prospect was discovered in 1987 and has an inferred resource of 324,000oz of gold, Explaurum believes.
“After several efforts to engage in dialogue with the Explaurum board, including efforts to exchange data under a confidentiality agreement, Ramelius subsequently made the offer direct to shareholders,” the suitor said.
“Ramelius believed Explaurum was not in possession of any additional material information that had not already been released to the ASX under its continuous disclosure obligations.”
But chairman Chris Baker said it was Ramelius who broke off the previous talks between the two companies by choosing to make an “unsolicited, inadequate and opportunistic offer” for Explaurum.
“To set the record straight, these previous discussions included an invitation from Explaurum for Ramelius to access detailed information that it now represents to Explaurum shareholders, and also its own shareholders, that it was not offered,” he said.
“By declining that offer of due diligence and launching its unsolicited takeover offer, Ramelius has laid bare its preferred option of seeking to place Explaurum shareholders on a clock – right at a time when a number of key workstreams for the company, including the Tampia [bankable feasibility study], are approaching completion.
“This dynamic is further emphasised by the fact that, at the time of launching its offer, it was conveyed to Explaurum by Ramelius that waiting would serve only the interests of Explaurum shareholders. We do not disagree with this proposition.”
Ramelius said last week that Explaurum was dilly-dallying and it was forced to extend its takeover offer.
The suitor also said Explaurum relied on numerous “under-value” statements that were not supported by a quantitative assessment within the offer period but instead pointed to the “potential to increase” value at a point in the future.
Explaurum said the claim “misrepresents the true position”.
“The Explaurum board has undertaken a considerable assessment of value with particular reference being made to the robust Tampia project feasibility study outcomes released in May 2018,” the company said.
“Furthermore, while Explaurum naturally points to the range of potential upside that currently exists to its base case value assessment, the Explaurum board’s ‘undervalue’ statement is based on its current base case assessment of Explaurum value.”
Explaurum also disputed a number of Ramelius’ other claims, including that it had been given “considerable time” to explain to its shareholders the value of its current assets and that no other offers had emerged.
Explaurum said it outlined clearly to Ramelius that it required an eight-to-12 week period to fully outline its current value proposition to its shareholders.
Tampia is about 130km from Ramelius’s Edna May mine in Western Australia.
Ramelius believes there could be operational and capital cost synergies between the two operations, and the addition of the Tampia Hill project to its portfolio would maintain its exposure to ongoing exploration potential.
“We believe it is in the best interests of all Explaurum shareholders for them to await the release of the independent expert’s report on Explaurum expected in mid-November,” Mr Baker said.
Explaurum’s shares slipped 4.2 per cent to 11.5c on Tuesday afternoon.