The ink had barely dried on the settlement between Spectrum Metals (ASX:SPX) and Venus Metals (ASX:VMC) before Ramelius Resources (ASX:RMS) made its move on Spectrum.

Under the cash and scrip deal, Ramelius is offering one of its shares for every 10 SPX shares and 1.7c per SPX share, which equates to about 15c per SPX share (or roughly $208m) — a 52 per cent premium to Spectrum’s last closing price of 9.9c on Friday.

Spectrum’s directors unanimously recommended the offer and indicated that they would accept the offer for all their shares.

The takeover adds the high-grade Penny West gold project in Western Australia to Ramelius’ portfolio, which the company says is in line with its goal of acquiring high-quality assets within a radius of existing production hubs without incurring significant on-site capital expenditure.

Penny West currently has a resource of 799,000 tonnes at 13.8 grams per tonne (g/t) gold, or 355,500 ounces of contained gold, and has further exploration potential at depth and along strike.

Ramelius plans to carry out a comprehensive review to determine the optimal pathway to first cash flow from the project upon completion of the offer.

The company produced 196,679 ounces of gold in the 2019 financial year at an all-in sustaining cost of $1,192 per ounce and recorded a net profit after tax of $21.8m.

It expects to produce between 205,000 and 225,000 ounces of gold in the current financial year.

Spectrum settled its legal dispute with fellow Youanmi explorer Venus over the Penny West project by paying $850,000. Separate claims against its managing director Paul Adams and former director Davide Bosio have also been settled.


In other ASX gold news today:

Red 5 (ASX:RED) has upgraded the reserve at its Darlot gold mine in Western Australia by 26 per cent to 2.6 million tonnes (mt) at 3.3g/t gold, or 275,000 ounces of contained gold, since the end of June last year.

This includes mining depletion of 37,738 ounces of gold up to the end of December 2019.

Resources have also increased, by 16 per cent to 10.8mt at 3.5g/t gold, or 1.2 million ounces of contained gold.


Meanwhile, Vango Mining (ASX:VAN) has intersected high-grade gold at the Ned’s Creek farm-in project in Western Australia’s Mid-West region.

This includes a top hit of 4m at 9.63g/t gold within a broader zone of 16m at 2.16g/t gold from 84m.

Vango is earning a 51 per cent interest in the project, which adjoins its Marymia project, from Lodestar Minerals (ASX:LSR).