07/12/2021 - 16:21

Emerald aims for Bullseye

07/12/2021 - 16:21

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Emerald Resources is proposing to acquire gold explorer Bullseye Mining in a $117 million scrip deal, granting the unlisted company some respite from its ongoing legal action.

Emerald aims for Bullseye
Photo: Bullseye Mining

Emerald Resources is proposing to acquire gold explorer Bullseye Mining in a $117 million scrip deal, granting the unlisted company some respite from its ongoing legal action.

The companies announced to the ASX on Tuesday that they had signed a takeover bid implementation agreement for Emerald to acquire all issued shares of Bullseye via an off-market takeover.

Of interest to Emerald are Bullseye’s three Western Australian gold projects, the flagship North Laverton Gold Project, the Southern Cross gold project and the Aurora gold project.

Under the deal, Bullseye shareholders would receive one new Emerald share for every 3.43 Bullseye shares held, valuing Bullseye at some $117 million.

Bullseye chairman Peter J Burns said his board has unanimously recommended the “compelling” offer to shareholders and urged them to accept the offer in the absence of a superior proposal.

The offer comes as Bullseye seeks to fend off three matters currently subject to legal action.

One of these, brought before the Supreme Court of Western Australia by shareholder Hongkong Xinhe International Investment Company, alleges that affairs of the company have been “conducted in a manner which is oppressive to or unfairly discriminatory against Xinhe and contrary to the interests of shareholders as a whole”.

The trial commenced in September and is due to continue until March 2022.

Bullseye and its directors say they are continuing to vigorously defend this matter.

The second matter relates to $366,000 Mr Sam Cheng and Mr Eddy Cheng, as trustees of the NEZA Trust, claim they are owed by Bullseye in capital raising fees.

Bullseye said it has lodged a defence and counterclaim, denying any amount owing by Bullseye and seeking to recover an amount totalling $429,000.

That matter is due before the District Court of Western Australia in January.

Mr Sam Cheng has also brought further action before the District Court of Western Australia against Bullseye, seeking $580,000 in consultancy fees but a trial date is yet to be set. 

Bullseye has also lodged a defence and counterclaim against Mr Sam Cheng and other parties, seeking damages for conspiring to cause harm and injury to Bullseye.

Emerald says it has examined the legal matters however and is “satisfied there is no expected outcome that would have a negative impact on Emerald and its acquisition of Bullseye”.

Steinepreis Paganin is acting as Australian legal adviser to Emerald and Euroz Hartleys is acting as corporate adviser to Emerald.

MPH Lawyers is acting as Australian legal adviser to Bullseye.

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