21/10/2020 - 12:00

Nordgold’s new offer for Cardinal

21/10/2020 - 12:00

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Russian miner Nordgold has continued its fight for Perth-based Cardinal Resources, having matched an offer to buy the gold explorer for $1 per share.

Nordgold’s new offer for Cardinal
Nikolai Zelenski says Nordgold is committed to developing the Namdini project in Ghana. Photo: Nordgold

Russian miner Nordgold has continued its fight for Perth-based Cardinal Resources, having matched an offer to buy the gold explorer for $1 per share.

The new offer follows a third bid from China’s Shandong Gold, which was endorsed by Cardinal directors in September.

That deal valued Cardinal at around $566 million.

A bidding war sparked in June, when Shandong offered to buy Cardinal for 60 cents per share, trumping an earlier 46-cent bid from Nordgold.

Cardinal has been reluctant to accept an offer from Nordgold, noting that a deal with the mining giant could be subject to regulatory issues, particularly in Canada.

A deal with Shandong, which has received all regulatory Chinese approvals, can be satisfied within a reasonable timeframe, Cardinal says.

The company, whose flagship asset is the 5.1-million ounce Namdini gold project in Ghana, previously said it did not have the substantial capital required to bring Namdini to production.

Nordgold says it has the project development expertise and robust balance sheet to develop the project.

In the company's latest bidder's statement, chief executive Nikolai Zelenski alleged Nordgold had received change of control approval from the government of Ghana, while Shandong Gold had not. 

“In the event that Nordgold does not acquire the full outstanding share capital of Cardinal, but remains the largest shareholder, we stand ready to work with Cardinal management to quickly progress the Namdini project and to provide technical and financial support to underpin its success," he said.

Cardinal has advised shareholders should take no action towards the latest bid from Nordgold.

The offer is scheduled to close on November 3.

“Cardinal is currently considering the implications of the increased Nordgold takeover bid in consultation with its advisors and having regard to the provisions of the bid implementation agreement with Shandong Gold,” Cardinal said.

Its shares were down 2 per cent at 2:34pm AEDT to trade at $1.03.

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