Ramelius Resources and Musgrave Minerals have entered into a bid implementation agreement (BIA).
The BIA is in accordance with what Ramelius will offer to acquire all the issued ordinary shares of Musgrave by way of a cash and scrip off-market takeover offer.
Under the offer’s terms, Musgrave shareholders will receive one Ramelius share for every 4.21 Musgrave shares held and $0.04 cents in cash for every Musgrave share held.
The offer values each Musgrave share at $0.34, based on the one-day volume weighted average price of Ramelius shares on June 30 of $1.263, and implies a total undiluted equity value for Musgrave of approximately $201 million.
The Musgrave board of directors have unanimously recommended that its shareholders accept the offer, in the absence of a superior proposal.
Westminex, Musgrave’s largest shareholder, has also supported the offer by signing pre-bid agreements representing approximately 9.70 per cent of Musgrave shares on issue on the same terms as the Musgrave directors. The total level of pre-bid commitments is approximately 12.13 per cent.
Ramelius said it has the financial capacity, operational experience and exploration expertise to continue the work done by Musgrave, with a view to expand the existing mineral resource and develop the Cue Project to maximise the project’s value for both sets of shareholders.
The Cue Project hosts an estimated mineral resource of 12.3 megatonnes (Mt) at 2.3 grams per tonne (g/t) Au for 927,000 ounces of gold. It is located approximately 35 kilometres from the Mt Magnet gold mine.
Ramelius managing director Mark Zeptner said the company looks forward to welcoming Musgrave shareholders as Ramelius shareholders and encourages Musgrave shareholders to accept the offer as soon as possible.
“Subject to the offer being successful, Ramelius is looking forward to continuing drilling across the tenement package to expand the existing resource and ultimately developing the Cue Project into a high-grade satellite mine for the Mt Magnet production centre, to maximise value for all shareholders,” Zeptner said.
Musgrave Minerals managing director Robert Waugh said the company’s board is pleased to endorse Ramelius’ cash and scrip offer, in the absence of a superior proposal.
“Ramelius is a reputable and well respected Western Australian gold miner with a track record of operational excellence and delivering strong capital returns for shareholders. We are confident that the Cue Project will be in good hands, should the offer be successful, and in the event that does occur, we would look forward to seeing the project contribute to the ongoing success of Ramelius’ Mt Magnet operations,” Waugh said.
The news arrives as Musgrave knocked back Westgold Resources’ takeover offer.
