Brisbane-based Norton Gold Fields Ltd has opened its $15 million friendly takeover bid for West Perth-based Bellamel Mining Ltd.
Brisbane-based Norton Gold Fields Ltd has opened its $15 million friendly takeover bid for West Perth-based Bellamel Mining Ltd.
Bellamel shareholders will receive four Norton shares for every five Bellamel shares owned, representing a value of 19.6 cents each Bellamel share.
Shares in Bellamel last traded at 16c at 12:30 AEST.
Bellamel's board has already recommended shareholders accept the offer in the absence of a superior offer.
"Both Bellamel and Norton's interests are aligned in their plans to develop gold assets in the Kalgoorlie region," Norton chairman Anthony McLellan said.
"This is the next step in our plan to develop into a major gold company. It follows our acquisition and turnaround of Paddington Gold Mine in August 2007."
Below is the Norton's announcement:
Norton Gold Fields Limited (Norton) (ASX code: NGF) today opened its off-market scrip Offer for all ordinary shares of Bellamel Mining Limited (Bellamel) (ASX code: BMM).
Bellamel shareholders will receive four (4) Norton shares for every five (5) Bellamel shares. The Offer is scheduled to close at 7.00pm (EST) on 29 August 2008.
Based on the last closing price for Norton Shares of $0.245 on 24 July 2008, Norton's Offer values each Bellamel Share at $0.196 per share representing a 25.6 percent premium to Bellamel Shareholders. In addition, the offer provides an attractive offer premium of 28.8 percent based on respective Norton / Bellamel share prices as at 27 May 2008 (the last trading day before the announcement of this offer).
The Board of Bellamel unanimously recommends that Bellamel Shareholders accept the Offer and have indicated that they intend to accept the Offer with respect to all shares they control, in the absence of a superior proposal.
As announced on 29 May 2008, the Offer is subject to a number of conditions which are set out in the Bidder's Statement, including Norton receiving valid acceptances for at least 90 per cent of Bellamel Shares.
Norton Chairman, A. Anthony McLellan said the company was looking forward to welcoming Bellamel shareholders and to the opportunity to create a leading Australian gold producer.
"Both Bellamel and Norton's interests are aligned in their plans to develop gold assets in the Kalgoorlie region. We're confident Bellamel shareholders will see the benefits of a combined gold producer and the compelling logic of bringing the two companies together to deliver synergies and unlock shareholder value," Mr McLellan said.
"We believe that the Offer is attractive to Bellamel Shareholders. The merger will bring together the exploration upside and development strategy of Bellamel with the substantial assets, development and operating skills and experience of a significant gold producer," Mr McLellan added.
"This is the next step in our plan to develop into a major gold company. It follows our acquisition and turnaround of Paddington Gold Mine in August 2007."
"The combined entity will have significant JORC Code-compliant Reserves and Resources in one of the world's foremost gold provinces, together with a major operating mill."
Benefits to Bellamel
The proposed merger would provide the ability to accelerate development of Bellamel's Kalgoorlie West Gold Project by:
Progressing the permitting of the Fort William project and bringing the project into early production.
Bringing development of other deposits forward using Norton's Paddington mill.
Advancing the feasibility study into the development of a heap leach treatment operation at the Navajo Chief project.
Enhancing Bellamel's exploration program via integration with Norton's overall exploration strategy.
Benefits to Norton
The merger of Norton with Bellamel has the potential to add significant value to the operation of Norton's Paddington Gold Mine (Kalgoorlie) by enhancing the project pipeline of near- and longer-term deposits to be processed at Norton's 3 Mtpa Paddington processing plant.
The merger would further strengthen the Paddington Life-of-Mine plan by providing early access to additional sources of higher-grade oxide ore. The immediate targets could be expected to provide the opportunity for up to an incremental 25,000 oz pa to Paddington's production from expected higher-grade oxide feed.
Additionally, Bellamel's projects offer considerable potential for a heap leach operation that would increase annual gold production at Norton's Kalgoorlie operations.
Norton intends to integrate the Bellamel exploration program within Norton's existing program to deliver both growth in reserves and resources and higher grade feed to Paddington.
Bellamlel's assets are proximate to Norton's 3 Mtpa Paddington mill.
