Ampella recommends $41m takeover bid

Subiaco-based gold explorer Ampella Mining has recommended its shareholders approve a proposed $41 million off-market takeover bid from Egypt-focused miner Centamin.

Under the proposed transaction, Ampella shareholders would receive one new Centamin share for every five Ampella shares held.

The offer values Ampella at $40.9 million or 16 cents per share, representing a 113 per cent premium to Ampella's last closing price of 7.5 cents.

Centamin, which was founded in Perth but delisted from the ASX in 2010 in favour of stock exchanges in Toronto and London, is this year expected to reach production of more than 320,000 ounces at its flagship Sukari gold mine in Egypt.

Ampella chairman Peter Mansell said the deal would allow the company to best progress exploration at its Batie West gold project in Burkina Faso.

“After careful consideration, the board of Ampella is pleased to recommend this transaction to shareholders," Mr Mansell said.

"By accepting the offer, Ampella shareholders will not only receive a substantial premium to market prices, but also gain the benefits of being part of a larger, profitable gold producer, while retaining some exposure to the exploration potential that the Batie West project offers." 

Should the takeover go ahead, Centamin will offer a portfolio of assets in Egypt, Burkina Faso, Cote d’Ivoire and Ethiopia with a combined estimated resource of 18.7 million ounces of gold.

Ampella’s largest shareholder, Taurus Funds Management, has entered into a pre-bid acceptance agreement with Centamin to accept the offer, subject only to no competing offer being recommended by the Ampella board.

"This acquisition provides a significant expansion of Centamin’s exploration drive and also a first entry into a highly prospective region of Burkina Faso, which in recent years has proven to be a stable and attractive destination for mining investment," Centamin chairman Josef El-Raghy said.

The bid is subject to a 90 per cent minimum acceptance condition and Ampella must retain a minimum cash balance of $10 million up to January 31 2014 and ensure there is no material adverse change in respect of the company or its assets.