New $65m bid for Focus Minerals' Coolgardie project

UPDATED: Focus Minerals has opted to continue negotiating with Horizon Minerals over the sale of its Coolgardie gold project, despite Hong Kong-listed Hanking Gold Mining submitting an alternative offer.

Hanking announced on Tues 24 September an offer to acquire the gold asset for up to $65 million.

It told the Hong Kong Stock Exchange it had made a non-binding indicative offer (NBIO) of between $56 million and $65 million, with an upfront payment of $12 million and the balance to be paid in tranches over 3.5 years.

Argonaut is Hanking’s financial adviser, and Blackwall Legal LLP is the legal adviser.

The Coolgardie project is located adjacent to Hanking’s existing McPherson’s gold project, which it acquired following a $37.5 million takeover of Primary Gold in February 2018.

The project has been on care and maintenance since August 2013.

Its 235 square kilometre tenement package contains a 2.1 million ounce resource, and a 1.2 million tonne per annum processing plant.

The Hanking announcement came after Focus struck a preliminary deal with Horizon Minerals (formerly Intermin Resources) in February this year to sell the Coolgardie project for $40 million.

Amid the surging gold price since the start of this year, Horizon raised its offer to $55 million earlier this month to match a bid from an unnamed third party, which presumably was Hanking.

Focus announced late on Wed 25 September it had rejected the Hanking proposal.

"After considering all relevant circumstances, and seeking input from its advisers, the Focus board has concluded that the Hanking NBIO, as currently presented, is not a superior proposal for the purposes of the Exclusivity Deed," it stated.

"Focus informed Hanking of that decision late on 23 September 2019. 

"Factors relevant to the Focus board's determination include that the Horizon Minerals proposal is substantially more advanced (including due diligence being completed) and currently has greater execution certainty.

"In the absence of a superior proposal, Focus will continue to engage with Horizon in relation to its previously announced (improved) proposal to acquire the Coolgardie Gold Project."