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Gold miner Ramelius Resources says takeover target Explaurum is dilly-dallying and it has had to extend its $59.2 million all-scrip offer.

Ramelius (ASX:RMS) released its response to Explaurum’s (ASX:EXU) target’s statement this morning saying that the company had “delayed key information milestones beyond the end of the initial offer period” of October 25.

As a result, the suitor has now extended the 12.3c per-share offer to November 23.

At the time the offer was announced, it was a 66 per cent premium to Explaurum’s share price of 7.4c.

Explaurum’s shares have since gone for a run, reaching as high as 12.5c and currently trading at 11c.

The target, however, is not on board with the offer, saying “the offer consideration is inadequate and does not reflect the underlying value of Explaurum’s Tampia gold project and the potential exploration upside”.

Explaurum (ASX:EXU) shares over the past year.
Explaurum (ASX:EXU) shares over the past year.

Ramelius hit back saying Explaurum relies on numerous “undervalue” statements that are not supported by a quantitative assessment within the offer period but instead point to the “potential to increase” value at a point in the future.

“Explaurum has not articulated a plan as to how they intend to fund and construct the development of the Tampia gold project in a manner that adds value for shareholders over and above the Ramelius offer,” the suitor said.

“Ramelius believes the current consideration represents excellent value for Explaurum shareholders particularly when considering the 66.2 per cent premium to Explaurum’s closing share price of 7.4 cents on 7 September 2018.”

The suitor pointed to the uncertainty regarding the ability of Explaurum to independently develop the $118.5 million Tampia project particularly given the likely requirement to raise substantial amounts of new equity, most likely at a discount to the pre-offer share price.

Ramelius also rebuffed claims by Explaurum that its plan for the future development and operation of the Tampia project is uncertain.

“Ramelius produced over 200,000oz of gold in FY2018 and finished the September 2018 quarter with more than $100 million in cash and gold,” the company stressed.

“As a result, it can, with confidence, deploy capital in a manner that provides a large degree of certainty around the development of Tampia Hill and other projects within the vicinity of its existing Edna May mine.”

Explaurum’s Tampia Hill project is about 130km from Ramelius’s Edna May mine.

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.

The company met with Ramelius a week before the offer was tabled in September to better understand the proposal and to explore the potential benefits of a merger.

Explaurum said Ramelius declined to provide “meaningful information” and the parties agreed to continue talks.

But Ramelius released its offer anyway.