Gold is booming and competition for quality takeover targets is fierce. Most recently, advanced gold explorers Egan Street (ASX:EGA) and Azumah (ASX:AZM) have announced improved bids from their respective suitors.

In July, the $970m Silver Lake Resources (ASX:SLR) lobbed an attractive takeover bid at high-grade success story Egan Street.

Egan Street is focused on building out its Rothsay project — a high-grade, underground development just 85km south-east of Silver Lake’s Deflector mine and processing hub in WA.

This deal valued Egan Street at 40c per share, giving it a $52.2m market cap.

This was a 28.9 per cent premium on the last closing price of 31c and was its highest share price since listing three years ago.

The Egan Street board and major shareholder Lion Selection (16.2 per cent) unanimously recommended the offer.

In October, Egan Street received a competing takeover proposal from privately owned Adaman Resources.

But Silver Lake — which has final dibs — has now increased its offer consideration to 46.1c per share, which implies a $63.2m total transaction enterprise value.

And there’s an added bonus: Silver Lake will increase that to 50c per share (or $68.3m) if the miner obtains at least 38 per cent of Egan Street by 7pm Sydney time on November 8.

The share price was up over 53 per cent to 47.5c in morning trade:


In Azumah’s case, the original takeover attempt by joint venture partner Ibaera was not a welcome one.

The advanced Ghanaian explorer was hit with the hostile bid in late September, when Ibaera lodged an unconditional all-cash offer with the ASX to purchase all outstanding shares in Azumah for 2.8c each.

Ibaera, which already held 9.21 per cent of Azumah, has a 42.5 per cent (and growing) interest in the long-life, high-margin 1.03-million-ounce reserve Wa project.

Azumah called the offer “highly opportunistic” in light of the strong gold price, a pending Wa project feasibility study, and upside potential from the underground discovery at Bepkong identified this year.

And shareholders seemed to agree. In late October, Ibaera was forced to increase its off-market unconditional cash takeover offer for all shares in Azumah to 3.3c per share.

This time, Azumah directors unanimously recommended that shareholders accept the increased offer.

“We recognise that some shareholders may have preferred to realise the ultimate vision of successfully bringing the Wa gold project into production,” chairman Michael Atkins says.

“But after balancing the increased price now on offer for Azumah shares against the inherent future risks of successfully completing financing, construction and entering into steady state production, as a board we unanimously believe that accepting the increased offer is the best path forward for shareholders.”


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