Ramelius outlines merits of its offer for Explaurum

19th October 2018 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – Gold miner Ramelius Resources has extended the deadline for its takeover offer of Western Australian explorer Explaurum until November 23, arguing that its takeover offer had merit.

Ramelius in September launched an all-scrip bid for Explaurum, offering one of its own shares for every four Explaurum shares held, valuing the takeover target’s shares at 12.3c each.

The offer represented a 66.2% premium to Explaurum’s closing price on September 7, and a 59.7% premium to the company’s ten-day volume-weighted average price, as well as a 50% premium to its 30-day volume-weighted average price.

Explaurum, however, has urged shareholders not to accept the offer, calling it “inadequate and opportunistic”, and saying that it did not reflect the underlying value of the Tampia gold project and its potential exploration upside.

Ramelius on Friday argued that its offer represented an “excellent value” for Explaurum shareholders, particularly considering the uncertainty around the firm’s ability to independently develop the Tampia project, and potential synergies with existing Ramelius operations.

The gold miner also argued that Explaurum had provided no additional information on how the project would be funded, while also failing to provide an independent assessment or basis for its “undervalued assertions”. 

A May 2018 feasibility study estimated that Explaurum would require A$130.8-million to build a 1.5-million-tonne-year operation at Tampia. The openpit mine is expected to deliver 490 000 oz of gold over its five-year mine life. 

Ramelius stated that its plans for the Tampia project were straightforward, with the company intending to conduct a thorough review of the merits of the current mine plans to develop the Tampia Hill project on a standalone basis. If a superior, alternate development option presents itself during this process, Ramelius would make capital and development decisions in the best interest of all stakeholders.

The gold miner also defended its own assets and ability to deliver an underground operation, pointing out that Ramelius’ own assets had delivered A$92.9-million in operating cash flow over the last four financial years, and that it had successfully transitioned its Wattle Dam and Vivian operations from openpit to underground operations, and would do so with the Edna May mine.