JOHANNESBURG (miningweekly.com) – TSX- and LSE-listed Centamin on Tuesday made an offmarket bid to acquire 100% of ASX-listed junior explorer Ampella Mining.
Centamin, which entered into a binding takeover bid implementation deed with Ampella, offered shareholders of the junior explorer one new Centamin share for every five Ampella shares held.
This equated to A$40.9-million, or A$0.16 a share, representing a 113% premium to Ampella's last closing price of A$0.075 and a 77% premium to the 20-day volume-weighted average price on the ASX, both as at December 6.
“After careful consideration, the board of Ampella is pleased to recommend this transaction to shareholders. By accepting the offer, Ampella shareholders will not only receive a substantial premium to market prices, but also gain the benefits of being part of a larger, profitable gold producer, while retaining some exposure to the exploration potential that the Batie West project offers,” Ampella chairperson Peter Mansell said in a statement.
The offer was “unanimously recommended” by the Ampella board of directors, who have confirmed they intended to accept the offer for the shares they control.
Ampella's largest shareholder Taurus Funds Management had also entered into a prebid acceptance agreement with Centamin to accept the offer for its 18.88% stake.
Ampella Mining last year abandoned negotiations for possible takeover or partnerships, after it was unable to secure a “sufficiently attractive” proposal, despite generating strong interest from global gold miners.
In August, the junior explorer announced a range of company-wide cost-cutting measures, embarking on a 33% reduction in its expatriate staff, as well as a 50% reduction in its exploration, field and administration staff, amid a volatile commodity market.
The deal would allow Ampella shareholders to “become part of a significant” gold production company, with Centamin's significant cash resources and expected future cash flows from its Sukari gold mine, in Egypt, providing “a high level” of funding certainty in the current challenging market environment.
Centamin's long-life Sukari gold mine was expected to deliver more than 320 000 oz during 2013, increasing to between 450 000 oz/y and 500 000 oz/y from 2015.
Ampella’s Batie West gold project, in Burkina Faso, which hosts the 3.25-million-ounce Konkera Resource, and 1 200 km2 of exploration ground across the border from Batie West in Côte d'Ivoire, would also boost Centamin’s development portfolio.
“Centamin intends to progress a substantial exploration programme at Batie West, aimed at developing the potential for further significant resource growth and realising the project's full value, ultimately through development of a sizeable producing operation,” Centamin noted.
Combined, the group would boast a diverse portfolio of assets in Egypt, Burkina Faso, Côte d'Ivoire and Ethiopia, with an aggregate estimated resource of 18.7-million ounces of gold, of which 15.1-million ounces was measured and indicated.
"This acquisition provides a significant expansion of Centamin's exploration drive and also a first entry into a highly prospective region of Burkina Faso, which, in recent years, has proven to be a stable and attractive destination for mining investment,” Centamin chairperson Josef El-Raghy said.
The offer remained subject to a number of conditions, including Ampella’s retention of a minimum cash balance of A$10-million until January and no regulatory intervention restraining or prohibiting the deal, amid other customary conditions as set out in the prebid agreement.