Ground Breakers: Takeover battles fizzle as gold fever reignites on ASX
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The game of oneupmanship lasted just a couple rounds as Gold Road today announced it would not lift its 56c a share all cash offer for the target company.
Apollo, which owns the 1.1Moz Lake Rebecca gold project about 100km east of Kalgoorlie, entered play last month when Ramelius lobbed a 56c a share bid consisting of 34c a share in cash plus stock in the Edna May gold mine owner.
Gold Road cut in with the $166 million all cash offer and a 19.9% stake that blocked Ramelius’ bid by making its 90% acceptance condition impossible to achieve.
But Ramelius and MD Mark Zeptner have played Knifey-Spooney before and last week revised their offer to 62c a share, increasing the scrip component of the bid to value Apollo at $181 million.
Gold Road, which owns half of the 300,000ozpa Gruyere gold mine in WA, has said ‘yeah, nah’, leaving its original bid on the table but declining to improve its offer.
It removed its standing bid in the market.
That saw Apollo shares dip by almost 5% this morning.
Westgold eventually got Gascoyne’s board to accept its 53c a share all scrip merger offer and the eleventh hour, but Gascoyne’s merger with junior explorer Firefly Resources (ASX:FFR) was too far gone.
The cancellation of that deal was a condition of the Westgold takeover bid.
The prize in the Gascoyne offer would have been the Dalgaranga gold mine and in particular its 2.5Mtpa processing plant, which Westgold viewed as a potential fourth hub for its Murchison gold projects.
Westgold will begin studies next year into a fourth processing hub, executive director Wayne Bramwell said today.
The gold miner also announced it would begin a new underground mine at Fender, a former open pit mined by Normandy in the 1990s and cutback by Westgold last year which will help feed the Tuckabianna mill near Cue.
“Fender is the next underground mine planned to leverage Westgold’s existing infrastructure in the Cue region,” Bramwell said.
“It will initially produce at a rate of ≈300,000–350,000tpa, is a simple and low cost development and will leverage the existing Big Bell infrastructure approximately 3.5km to the north.
“With Big Bell approaching full capacity we have an excess of ore sources that can feed our Tuckabianna processing hub.
“With Fender coming online in FY22 Westgold can now sequence our project pipeline including Shocker – 1600, the Black Swan Group targets, Golden Crown and Great Fingall and begin to consider options to establish a fourth processing hub.
“Evaluation studies will commence in the new year as to the appropriate scale and location.”
Gold prices climbed back above US$1800/oz to around US$1818/oz (over $2450/oz Aussie) at the end of last week.
The move has sparked gold fever on the ASX, with recently downtrodden gold stocks enjoying a moment in the sun.