PERTH (miningweekly.com) – Gold miner Ramelius Resources on Monday unveiled a takeover offer for fellow listed Breaker Resources, which owns the Lake Roe gold project, in Western Australia.
Under the terms of the all-scrip off-market takeover offer, Breaker shareholders would receive one Ramelius share for every 2.82 Breaker shares held, valuing the offer price at 40c a share, representing a 41% premium to Breaker’s three-day volume weighted average share price (VWAP), and a 41.5% premium to the company’s 30-day VWAP.
Breaker’s directors have unanimously recommended that shareholders accept the offer in the absence of a superior proposal.
The company’s major shareholders, Electrum and Paulson, each holding a 9.95% interest in Breaker, have also signed pre-bid acceptance agreements, subject to a superior offer.
In a joint statement on Monday, the companies stated that the offer represented a number of benefits for Breaker shareholders, including synergies with Ramelius’ existing Rebecca project, which could lead to the joint development of both projects, Ramelius’ operational and exploration experience, the joint funding capabilities of the enlarged group, and a significant reduction in development and execution risk.
“This is a logical and sensible combination of assets that will eventually see the Lake Roe discovery become a mine after many years of definition. For Breaker shareholders to swap their Breaker shares for Ramelius shares at an attractive premium and retain full exposure to the upside at Lake Roe is compelling,” said Breaker executive director and CEO Sam Smith.
“Further, the opportunity for Breaker shareholders to fortify their interests in Lake Roe and diversify their interests, and their opportunities, by joining with one of Australia’s leading and profitable gold producers is compelling and rewarding for our shareholders. It provides an opportunity to share in the growth and economic impetus that a new long-term mining hub in the region can generate.
“Our board has accepted and recommended this transaction in the absence of a superior proposal. If that was to eventuate, the rewards for Breaker shareholders would only be greater.”
Ramelius told its own shareholders that the acquisition of Breaker was in line with the company’s objective to execute synergistic corporate opportunities to enhance the development of a new production hub, following the acquisition of Apollo Consolidated and the Rebecca project in early 2022.
“Lake Roe is an outstanding opportunity for Ramelius to consolidate its Rebecca acquisition from 2022 with almost three-million ounces in combined resources, underpinning a likely future production centre for the company,” said MD Mark Zeptner.
“The Breaker team has done an excellent job advancing Lake Roe to its current stage of development and has clearly demonstrated its potential for development into both opepit and underground mines in what we believe is a tier-one gold mining region. Subject to the Offer being successful, Ramelius is looking forward to restarting the drilling programme across the tenement package to expand the existing resource and ultimately developing Lake Roe into a long life producing asset along with our Rebecca project.
“Whilst we are busy completing prefeasibility work at Rebecca, with a June 2023 completion target, we will need to consider what this acquisition means for the overall project. We also look forward to welcoming Breaker shareholders as Ramelius shareholders and encourage Breaker shareholders to accept the offer as soon as they are able to.”
The offer is subject to a 50.1% minimum acceptance condition.