PERTH (miningweekly.com) – The directors of gold miner Phoenix Gold on Friday rejected a takeover offer from fellow-listed gold miner Evolution Mining, calling the cash offer inadequate.

In August this year, Evolution announced its intentions to make a competing offer, at a headline price of 12c a Phoenix share, which was a 20% premium to the takeover offer tabled by Chinese major Zijin Mining.

Evolution was offering 0.06 of its own shares and 6c in cash for every Phoenix share held, applying a value of 12.94c to Phoenix shares.

The Evolution offer would be subject to the gold price not falling below A$1 250/oz.

Earlier in September, the Phoenix directors rejected the Zijin offer, after an independent expert had valued the offer neither fair nor reasonable.

Zijin had offered 10c in cash for every Phoenix share, 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.

The takeover target on Friday announced that it had carefully reviewed the Evolution offer and had come to the conclusion that shareholders should reject the offer, as it was substantially below the 15.6c a share to 24.4c a share value ascribed by an independent expert.

Furthermore, Phoenix told shareholders that by accepting the Evolution offer, it would diminish their exposure to any potential increase in the value offered by the Phoenix assets, which included a 3.8-million-ounce resource in Western Australia.

“The directors consider the Evolution offer inadequate and do not provide sufficient consideration to Phoenix shareholders, particularly in the context of the strategic benefits the Phoenix assets offer to Evolution and its recently acquired Mungari operations,” said Phoenix executive chairperson Dale Rogers.

While the miner had advised shareholders not to accept the Evolution offer, Phoenix did say that it remained in discussion with Evolution regarding the ‘adequacy of the offer’.