29/04/2015 - 14:13

Private equity offer for Mungana

29/04/2015 - 14:13

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Shares in resources developer Mungana Goldmines have shot up 33 per cent today after an off-market takeover proposal backed by private equity group Denham Capital.

Private equity offer for Mungana
Former Karara Mining boss Stephen Murdoch is chairman of Auctus.

Shares in resources developer Mungana Goldmines have shot up 33 per cent today after an off-market takeover proposal backed by private equity group Denham Capital.

The bid has been lodged by Auctus Chillagoe, a special-purpose entity led by former Karara Mining boss Steve Murdoch and backed by Denham.

Denham is a US-based energy and resource private equity investment fund, with almost $US8 billion under management.

It announced last year it had committed an initial $US130 million to Auctus Minerals, which planned to make several large investments in mining projects.

“If you have a look at our project assessment and where we think there are opportunities, you are probably talking two to three projects; that’s what we’re budgeting and planning on at this stage,” Mr Murdoch told Business News last year.

The Mungana bid values the company at 13.5 cents per share, a premium of 29 per cent on yesterday’s closing price and a 26 per cent premium to the 30-day volume weighted average price.

Mungana is an offshoot of former miner Kagara (not to be confused with Karara Mining), which entered voluntary administration in 2012.

It was launched in 2010 as a gold spin-off but is focused on its King Vol zinc project in North Queensland.

It is still majority owned by Kagara’s liquidators.

In a response to the offer today, Mungana's board said it would meet to consider the deal.

It advised shareholders to take no action until the board has made a formal recommendation.

The takeover offer comers six weeeks after Mungana appointed former Mutiny Gold boss Tony James as its managing director.

Auctus is advised by KPMG and law firm Hardy Bowen.

Mungana was trading at 14 cents per share at the close.

 

 

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