PERTH (miningweekly.com) – Gold miner Gold Road Resources has made a A$308-million takeover offer for fellow listed DGO Gold, offering 2.16 of its own share for every DGO share held.

The offer implied a price of A$3.55 for each DGO share held, representing a 20% premium over DGO’s last trading price, and a 28% premium over its ten-day volume weighted average price.

The companies said in a joint statement on Monday that the offer provided DGO shareholders with a compelling opportunity to realise value for their DGO shares whilst retaining an ongoing exposure to DGO’s underlying assets through an interest in Gold Road.

DGO owns a portfolio of strategic investments in ASX-listed companies De Grey Mining, Dacian Gold, and Yandal Resources, as well as a portfolio of exploration tenements in the Pilbara, Yilgarn, Bryah and Stuart Shelf provinces.

“The acquisition of DGO aligns with Gold Road’s strategy to invest in high quality gold projects in tier one jurisdictions. In particular, Gold Road views the substantial shareholding in the owner of the high quality Hemi gold discovery, combined with our 50% ownership of the Gruyere gold mine, as an exciting opportunity to participate in two of the most significant gold discoveries in Western Australia this century,” said Gold Road MD and CEO Duncan Gibbs.

He said that Gold Road had the demonstrated capability and resources to advance DGO’s growth assets, creating value for shareholders, as demonstrated by the discovery of the Gruyere deposit, subsequent resource growth and definition and successful mine construction, commissioning and ramp-up.

“The Gruyere project was delivered, fit for purpose and without a lost-time injury, with full community support and full environmental compliance,” he added.

DGO Gold executive chairperson Eduard Eshuys said he was proud of the high-quality portfolio of assets DGO Gold has accumulated.

“DGO has consistently traded at a discount to the value of its assets, and this offer not only recognises and unlocks that value, but provides DGO shareholders with ongoing exposure to these assets and the Gold Road portfolio, as part of a more liquid investment in a cash flow generating ASX200 gold producer.”

The two companies have inked a bid implementation agreement, which is subject to a number of conditions, including an 80% minimum acceptance by DGO shareholders, and DGO not divesting of any of its 14.4% shareholding in De Grey Mining, as well as other customary conditions.

Gold Road intends to waive all other conditions within six business days after the 80% acceptance is achieved and at this time the offer will become unconditional.