Azumah Resources has pushed back against Ibaera Capital’s hostile takeover bid, stating that the mining equity fund has paid substantially more for its current stake in the gold junior than the price of its takeover offer.
The Azumah board today advised shareholders to continue to take no action while it considers the takeover bid.
However, it said Ibaera had paid up to 3.7 cents per Azumah share in acquiring its current holding, a price higher than its current 2.8 cents per share bid.
However, Business News understands that Ibaera’s average entry price paid for the approximately 21 million shares it acquired between May 2018 and August 2018 is below the current offer price of 2.8 cents, after taking into account the dilution resulting from Azumah issuing 196 million of new shares in July this year.
The earliest date the Ibaera offer can open is October 2, and the offer must remain open for a minimum period of one month.
On Wednesday, Ibaera made a hostile $27.4 million takeover bid for fellow West Perth-based Azumah, as it seeks to take full ownership of the Wa gold project joint venture in Ghana.
Business News understands that Ibaera has increased its stake Azumah since it launched the offer from 9.2 per cent to 22.4 per cent at the close of trade today.
In its bidder’s statement lodged with the ASX, Ibaera said it had regularly sought engagement with the Azumah board to agree the optimal path for progressing the project under joint venture.
In response, Azumah said its board had been given just two days to respond to the takeover scheme proposal that was announced today, and that Ibaera had not responded to its request for more time.
An Ibaera representative is the project manager of the Wa gold project.
The feasibility study was to be completed in the final quarter of this year 2019, but is now scheduled for early 2020.
On September 11, Azumah said the Wa project had a net present value, at 5 per cent discount rate, of $US177 million, based on a $US1,300 per ounce gold price.
Shares in Azumah are currently flat at 2.8 cents per share at 11.30am AEST.
By Adrian Rauso
