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Gascoyne sticks to its guns

18th October 2021

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Gold miner Gascoyne Resources has continued to urge shareholders to reject a takeover offer from fellow-listed Westgold Resources, as the suitor continued to make its case.

Westgold has lodged its bidder’s statement for Gascoyne under which it is offering one of its own shares for every four Gascoyne shares held, representing a premium of 34.7% to Gascoyne’s shares at the close of business on September 29, and a 30.2% premium to its three-month volume weighted average share price.

The takeover offer from Westgold would be subject to the merger between Gascoyne and fellow-listed Firefly Resources, not proceeding.

Gascoyne has previously said that after careful consideration, the company’s board was of the belief that the Westgold offer undervalued Gascoyne’s shares and did not represent a superior alternative to the Firefly deal.

Gascoyne also unveiled a business plan too improve its cashflow by reducing capital investments during 2022 and 2023, by postponing the Stage 3 cutback of the eastern and western walls of the Gilbey’s pit, at its Dalgaranga gold mine, in Western Australia.

Westgold has labelled this new business plan as “speculative” and “high-risk”, and has questioned Gascoyne’s rejection of the takeover offer, saying it offered a 58% premium to the company’s closing share price on the day prior to the takeover offer announcement.

Westgold has also argued that the Firefly transaction could result in the destruction of some A$51-million in Gascoyne value, or around 20c a share, if the scheme is pursued.

Gascoyne and Firefly in June this year announced plans for Gascoyne to acquire all of the fully paid ordinary shares in Firefly through a scheme of arrangement, which would see Firely shareholders receive 0.34 Gascoyne shares for each Firefly share held.

Firefly’s board and three of its largest shareholders had backed the merger agreement with Gascoyne, and the two companies in July inked a demerger implementation deed to demerge their copper/gold and lithium exploration assets into a new energy metals focused exploration company called Firetail.

Gascoyne on Monday said that some of the concerns raised by Westgold were "misleading" and the company has refuted the statements made by Westgold regarding the operational and financial risks posed by the new business plan.

Meanwhile, the Firefly shareholder meeting is scheduled for October 27.

Edited by Creamer Media Reporter

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