Resources Top 5: Takeover flurry continues around ASX gold explorer, WA iron ore project developer ticks higher
Here are your top ASX small cap resources winners in morning trade Thursday, December 24.
The appearance of a late-stage bidder for West Africa gold explorer Cardinal Resources (ASX:CDV) on Christmas Eve gave its share price an added lift.
Russian and Emirati company Dongshan Investments said it is seeking projects in Africa, and that Cardinal Resources’ Namdini gold project fits this bill.
Dongshan’s offer is priced at $1.20 per share and represents a 15 per cent premium to the three-month volume weighted average share price of Cardinal Resources.
Dongshan’s offer is subject to a number of conditions including due diligence, financing, and Foreign Investment Review Board and regulatory approvals.
The company has an exploration and mining business in the Republic of Sudan, with production capacity for gold of 95,000 ounces per year.
Dongshan’s Sudanese subsidiary, Alliance for Mining, is the largest gold producer in Sudan, and said it is aiming to acquire world class assets.
Cardinal Resources said Thursday it had not received any formal takeover offer from Dongshan, and advised its shareholders to take no action.
“The board is currently considering the Dongshan indicative offer in detail, together with the special purpose committee and its financial and legal advisers,” said Cardinal Resources.
“Shareholders are advised to take no action at this time in relation to the Dongshan indicative offer,” it stated.
Cardinal Resources stands to pay Shandong Gold Mining a compensation amount of $5.94m if it were to breach its obligations under a bid implementation agreement relating to its takeover by the Chinese gold miner.
Meanwhile, Russian gold company Nordgold has dropped out of the nine-month takeover race for Cardinal Resources.
Nordgold has decided to accept Shandong Gold Mining’s offer of $1.075 per share for its shares in the ASX gold miner.
In a notice to the ASX Thursday, Shandong Gold Mining revealed it now held 43.39 per cent of Cardinal Resources’ shares, up from 12.89 per cent previously.
“The takeover offers for Cardinal have played out over an extended period, but ultimately resulted in a strong outcome for all shareholders, of which Nordgold has been the largest,” Nordgold chief executive, Nikolai Zelenski, said.
He added that Nordgold had made a substantial profit on its investment in Cardinal Resources, maximising value for its shareholders.
Nordgold had increased its takeover offer for the ASX gold company to $1.05 per share in mid-December from $1 per share.
Another ASX small cap mining stock to enjoy some Christmas cheer is Brockman Mining (ASX:BCK) whose share price rose significantly without any news.
The iron ore company may be benefitting from the buoyant price for the steel-making commodity which is trading close to $US162 per tonne ($213/tonne).
Brockman Mining is developing its flagship Marillana iron ore project in WA’s Pilbara region
The Marillana project is for 20 million tonnes per year of production over a 20-year period, and requires rail infrastructure to haul exports to Port Hedland.
The company has two options for its rail access, either to build its own railway or to negotiate access to the existing Pilbara Infrastructure railway.
Brockman Mining’s September quarter report said no mining and development activities had been undertaken by the company in the recent period.
A gold processing agreement announced by Bryah Resources (ASX:BYH) for its Tumblegum South gold project energised the company’s ASX share price.
The agreement provides Bryah Resources with access to Adaman Resources’ processing facility at the Kirkalocka gold mine starting in 2021.
The Tumblegum South gold deposit has an inferred gold resource of 600,000 tonnes at 22.2 grams per tonne gold for 42,000 ounces of gold.
Gold production is due to start for Tumblegum South in the second half of 2021, and ore will be transported to the Kirkalocka mine south of Mount Magnet.
“With the granting of the Tumblegum South mining lease in November 2020, we were able to advance negotiations with the team at Adaman Resources to this point,” managing director, Neil Marston, said.
“Obtaining access to the Kirkalocka gold processing facility brings Bryah another step closer to realising the value of its gold resources at Tumblegum South,” he added.
Another high-rising stock pre-Christmas Day was Orion Metals (ASX:ORM) which advanced by 25 per cent in early trade without issuing any update.
The explorer is focused on its Top Camp gold-copper project 40km west of Cloncurry in Queensland, comprising four mining leases.
Orion Metals sold its Tanami West rare earths minerals project in north-eastern WA last year for $250,000.
Lastly, AVZ Minerals (ASX:AVZ) came out of its trading halt to announce it has signed its first off-take agreement for its Manono lithium project.
The agreement is with GFL International, a subsidiary of China’s largest lithium compound producer Ganfeng Lithium Company.
AVZ Minerals is to provide 160,000 tonnes per year of spodumene concentrate to GFL for an initial period of five years with the possibility of extension.
“GFL has signed on to take 30 per cent of the Manono project’s initial saleable SC6 yearly tonnage, which is a massive endorsement for our project,” said managing director, Nigel Ferguson.
The Manono project is in the Democratic Republic of Congo and has an estimated spodumene resource of 269 million tonnes.
Manono has a capital cost of $US320m and a capacity of 4.5 million/year to produce 700,000 tonnes per year of lithium sulphate in its first stage.
The project has a net present value of $1.5bn after tax.