PERTH (miningweekly.com) – Australian gold miner Evolution Mining has launched a counter takeover offer for fellow-listed Phoenix Gold, giving shareholders in that company an alternative to the Zijin Mining offer.

Evolution, which currently holds a 19.8% stake in Phoenix, was offering 0.06 of its own shares, along with 6c in cash for each Phoenix share held. The offer valued Phoenix shares at some 12c each, and valued the company at A$56.4-million.

Evolution said on Thursday that the offer also represented a 20% premium to the current offer from Zijin.

Zijin in June said it would offer 10c a share in cash for all the shares of Phoenix, valuing the company at A$47-million. Zijin’s offer was conditional upon the Chinese company securing at least a 50.1% stake in Phoenix.

Phoenix raised some concerns about the Zijin bidder’s statement, which was submitted in early August, including Zijin’s failure to properly state the bid premium, references to Phoenix’s largest noninterested shareholder, references to historically deteriorating financial position, and Zijin’s belief that it was likely that a significant portion of Phoenix shareholders would accept the offer.

The concerns prompted Zijin to issue a new bidder’s statement earlier this week.

Rumours had been circulating for months that Evolution would seek to disrupt the Zijin takeover. Despite a May share sale agreement with Phoenix, worth A$5.7-million falling through in June, which cleared the way for the Zijin offer, Evolution acquired some 49-million Phoenix shares in an on-market buy, priced at 12c a share.

With the launch of its own takeover offer, these rumours have been proven true.

Evolution executive chairperson Jake Klein said there was clear commercial logic in obtaining the Phoenix assets, as they would provide synergies with the recently acquired La Mancha assets.

In April, Evolution entered into a binding agreement that would see La Mancha becoming Evolution’s largest shareholder and long-term strategic partner, while allowing Evolution to increase its production to between 530 000 oz/y and 600 000 oz/y.

La Mancha’s Australian operations include the high-grade Frog’s Leg underground mine and the adjacent White Foil openpit mine, in Western Australia, as well as the recently completed 1.5-million-tonne-a-year Mungari carbon-in-leach processing plant.

Klein noted that the Phoenix tenement package adjoined La Mancha’s Australian operations and covered a significant strike length of the highly prospective Zuleika shear and the Kunanalling shear.

“There is clear commercial logic in combining the Phoenix assets with the Mungari project, which we are acquiring from La Mancha. Evolution is committed to building a long-term presence in this exciting region of Western Australia and our intention to make this compelling bid for Phoenix is the next step in our strategy,” he added.

Evolution was expected to submit its own bidder’s statement by mid-September, and the offer would be subject to a limited number of conditions, including Foreign Investment Review Board approval, the completion of the La Mancha transaction and the spot gold price not falling below A$1 250/oz.

Phoenix had provisionally told shareholders not to take any action regarding the Evolution offer, saying that the conditions proposed by Evolution needed to be carefully considered by the Phoenix board before a recommendation could be made to shareholders.