PERTH (miningweekly.com) – ASX-listed Big River Gold has received a 36c a share cash takeover offer from TSX-listed midtier gold and copper producer Aura Minerals.

The takeover offer represented a premium of 33.3% to Big River’s last closing price, and a 44% premium to the company’s 90-day volume weighted average share price, as well as a 42.3% premium to its 60-day volume weighted average share price.

Aura told shareholders that the acquisition represents an attractive opportunity for Aura to expand its pipeline of development stage projects through the acquisition of Big River’s Borborema gold project, in Brazil. Borborema, which is expected to operate an openpit gold project, has a Joint Ore Reserves Committee-compliant measured and indicated mineral resource estimate of 1.87-million ounces of gold, at 1.14 g/t gold and an additional inferred mineral resource of 0.57-million ounces at 1.0 g/t gold.

Aura said that its management and skilled personnel have extensive experience in the Brazilian mining industry and are well suited to develop Borborema in partnership with Big River shareholder Dundee Resources.

“Our strategy is to grow beyond our current production plan through advancing high-quality projects that have a clear path to construction and are located in the Americas, preferably in jurisdictions where we are already operating. Borborema fits well within this strategy. We are also proud to partner with Dundee Resources on this project as they are a leader in the industry,” said Aura president and CEO Rodrigo Barbosa.

The independent board committee (IBC) of Big River has unanimously recommended that shareholders vote in favour of the takeover offer, in the absence of a superior proposal, with the company’s directors telling shareholders that they intended to vote in favour of the scheme of the shares held by them.

In addition, Dundee Resources, which holds a 19.3% stake in Big River, has also supported the transaction. Dundee is expected to receive a share consideration, instead of a scheme consideration.

Fellow shareholder Copulos Group, which holds an 18.8% interest in Big River, also intends to vote in favour of the transaction.

“The proposed scheme represents an attractive, all-cash offer which provides certainty of value for Big River shareholders. The Borborema project is at a critical stage of development, with significant future capital requirements and embedded development risks and uncertainties,” said Big River chairperson Andrew Richards.

“Having considered a range of alternative courses of action, Big River’s IBC has unanimously concluded that the scheme represents a compelling offer for our shareholders who would otherwise be facing significant future equity dilution as a result of capital cost increases, as well as inherent risks and uncertainties to fully develop a project such as Borborema. The scheme places the development of the Borborema project, including its future upside and risks, in the hands of an accomplished and well capitalised gold and copper producer.

“With a significant premium of over 42% to the 60, 90 and 180 trading day volume-weighted average share prices, and with the support of substantial shareholder Copulos, Aura’s offer provides Big River shareholders, other than Dundee, with certainty of value and the opportunity to realise their investment in full for cash.”

The transaction is subject to a number of conditions, including regulatory and court approvals, as well as shareholder approval. An independent expert will also be required to conclude that the transaction is in the best interest of Big River shareholders.

Big River shareholders are expected to meet in early July to vote on the transaction.